Not upheld: mortgage forbearance and arrears management; refusal of Consent to Let; refusal to waive early repayment charge complaint against Bank of Ireland (UK) Plc

Decision detail

Summary

Mr W complained that BOI failed to engage with his proposals to address financial difficulties arising from loss of secure employment, resulting in mortgage arrears and £30,000 of credit card debt. Mr W sought removal of arrears, immediate Consent to Let, and compensation for financial and mental health damage. BOI had granted interest-only concessions and extended 100% payment concessions while Mr W attempted to sell the property, but declined his requests for an ERC waiver and CTL. The ombudsman found BOI's concessions were reasonable, its refusal to waive the ERC was justified as a contractual term without a porting arrangement, and its decline of CTL was fair given the account arrears and incomplete financial picture. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders must treat customers in financial hardship fairly, balanced against the fundamental right to receive payment owed. BOI's provision of interest-only concessions followed by 100% payment concessions was reasonable given Mr W was attempting to sell the property. The ERC is a contractual term to which Mr W agreed, and BOI's policy of not waiving it absent a porting arrangement was justified. Regarding CTL, while the ombudsman acknowledged Mr W's logic, BOI was entitled to base its decision on actual circumstances rather than speculative future improvements, and the increased risk to the lender from tenants was a legitimate consideration. The fact that BOI declined Mr W's proposals does not constitute a failure to engage; fair treatment does not require agreement to all requests.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website