Not upheld: unfair treatment in loan administration; unfair charges; unfair valuation methodology; aggressive debt collection complaint against FI-NEST LTD

Decision detail

Summary

Miss C complained that FI-NEST, administrator of her shared equity mortgage, treated her unfairly following the end of the loan term in May 2021. The loan was extended to May 2024, but Miss C could not repay and had no contact with FI-NEST from August 2024 onwards. FI-NEST instructed solicitors in November 2024 and legal proceedings began in January 2025. Miss C disputed the redemption valuation of £149,950 and the £1,700 legal fees added to the balance. The ombudsman found that FI-NEST acted reasonably in pursuing legal action after extended attempts to engage, that the valuation was fair and supported by Miss C's own appraisals, and that legal fees were contractually recoverable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that FI-NEST, as administrator rather than lender, was required to act fairly and reasonably in exercising the lender's rights. The extensions granted (to May 2023 and May 2024) demonstrated reasonable accommodation. Once the final extension expired, FI-NEST's attempts to engage with Miss C were reasonable, and the decision to instruct solicitors after months of no contact (from August 2024 to January 2025) was justified. Service of legal proceedings by post was appropriate as Miss C had not agreed to email service and FI-NEST was unaware she was away. The redemption valuation of £149,950 was supported by two of the three estate agent appraisals Miss C provided, and she was offered the option of a formal surveyor's valuation but declined. The legal fees were recoverable under the loan terms on a full indemnity basis, and the amount was not excessive.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website