Not upheld: mortgage administration, lack of consent, failure to inform complaint against Furness Building Society

Decision detail

Summary

Mr W complained that Furness Building Society improperly allowed his ex-wife Ms X to switch their jointly held mortgage to a new fixed rate product without his consent, despite him explicitly rejecting the change. The mortgage was held jointly as part of their divorce settlement, with Ms X living in the property and Mr W living elsewhere. Furness applied the new five-year fixed rate in June 2025 under an exception process after Mr W refused to accept the mortgage offer. The ombudsman found that the fixed rate change did not negatively impact Mr W as it reduced the interest rate and affordability risk, and Furness mitigated any potential negative impact by committing to waive the early repayment charge if the property was sold or refinanced. The ombudsman determined that the underlying dispute between Mr W and Ms X should be resolved between them or through court, and that Furness reasonably had a process to handle such disputes. The complaint was not upheld, though Furness's £250 compensation for failing to keep Mr W informed was deemed fair.

The Ombudsman's reasoning

The ombudsman found that while Furness should not make changes to a jointly held mortgage that negatively impact a non-consenting party, the fixed rate change did not negatively impact Mr W. The lower fixed rate reduced the risk of arrears and credit file damage. The potential negative impact (early repayment charge) was mitigated by Furness's commitment to waive it upon sale or refinance. The ombudsman noted that lenders may reasonably have processes to handle disputes between parties and that Furness properly considered both parties' positions and its regulatory responsibilities. The ombudsman rejected Mr W's argument that the rate change would affect his ability to obtain his own mortgage, as the underlying liability remained unchanged and the lower payments actually improved affordability. The ombudsman determined that the dispute between Mr W and Ms X regarding the property and mortgage was a matter for them to resolve or take back to court, not for Furness to resolve by withholding preferential rates.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website