Not upheld: unfair treatment in mortgage sale decisions and valuation of properties complaint against Bank of Scotland Plc trading as Birmingham Midshires

Decision detail

Summary

Miss B and Mr K complained that Birmingham Midshires unfairly rejected their offers to sell five buy-to-let mortgaged properties in 2023 when interest rate rises made the mortgages unsustainable. They particularly objected to the rejection of verbal offers of £40,000-£50,000 for property S, which was subsequently sold at auction for £36,000, leaving a shortfall of over £25,000. The ombudsman dismissed the complaint, finding that Birmingham Midshires was contractually entitled to refuse sales that would not clear the full debt and was entitled to rely on independent valuations. The ombudsman also found that once in possession, Birmingham Midshires took reasonable steps to sell the properties, including obtaining independent valuations and marketing appropriately before using auction.

The Ombudsman's reasoning

Birmingham Midshires was not obliged to release its security unless the mortgage debt was repaid in full under the mortgage terms. It was entitled to rely on independent valuations when deciding minimum acceptable amounts. The verbal offers for property S were not binding - the buyer might not have proceeded or offered less after survey. Once in possession, Birmingham Midshires took reasonable steps including obtaining independent valuations, marketing on open market, and using auction when appropriate. The decisions made were reasonable based on the information available.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website