Not upheld: changes to mortgage terms without consent; forbearance and temporary payment arrangements complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr B complained that NatWest made changes to his joint mortgage without his consent, including converting to interest-only terms and implementing a payment arrangement, after his former partner requested forbearance support. The ombudsman found that NatWest did not act unfairly because the changes were temporary forbearance measures rather than permanent contractual modifications, and NatWest has an obligation to offer such support to borrowers in financial difficulty. The ombudsman noted that the payment arrangement actually benefited Mr B by preventing unauthorised arrears from being reported to his credit file. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman distinguished between permanent contractual changes (which require consent of all joint borrowers) and temporary forbearance measures (which do not). The ombudsman found that the interest-only switch and payment arrangement were temporary support measures offered in response to a request for financial assistance, not permanent contractual changes. The ombudsman also noted that the payment arrangement actually protected Mr B's credit file, as without it, unauthorised arrears would have been reported instead. The ombudsman acknowledged that while Mr B should have been informed, the lack of consent for temporary forbearance measures was not unfair given NatWest's obligation to offer support to borrowers in financial difficulty.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website