Not upheld: Lending decision and application processing delays; alleged discrimination complaint against Paragon Bank Plc

Decision detail

Summary

E, a limited company, complained that Paragon Bank Plc unreasonably delayed its decision on four Buy-To-Let mortgage applications submitted on 24 August 2025 and eventually declined them based on factors that should have been apparent from the outset. Mr W, representing E, also alleged discrimination. Paragon declined the applications on 23 October 2025, citing inability to verify source of funds, rapid portfolio expansion with low borrowing, loss-making status, income below £25,000, and marginal valuations. The ombudsman found the two-month timeline was not excessive, particularly as valuations were not received until 8 October, and that Paragon's lending decision was fair and reasonable. The ombudsman rejected claims of discrimination and found no evidence that information requests were duplicative. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Paragon was entitled to decline the applications based on fair and reasonable lending criteria. The two-month timeline from 24 August to 23 October was not excessive, particularly given that valuations could not be obtained until 8 October and Paragon had no control over valuation timescales. While some information Paragon relied upon was known from the outset, the marginal valuations could only be assessed once received, and income validation issues only emerged when accounts and tax calculations were provided in mid-September. The requests for information about source of wealth and creditors were distinct and not duplicative. There was no evidence of discrimination or that other applicants would have been treated differently. The complaint that Paragon should have declined sooner was rejected because Paragon could not have made a full assessment before the final valuations arrived.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website