Not upheld: unfair repossession and property sale conduct complaint against THE MORTGAGE BUSINESS PUBLIC LIMITED COMPANY

Decision detail

Summary

Ms B complained that TMB unfairly repossessed her buy-to-let property and sold it for less than its worth. She claimed TMB led her to believe she could sell at negative equity until the eviction date, then rejected her £40,000 offer on that day. She also argued TMB failed to properly value the property and sold it at auction for only £27,000, leaving her with a £30,000+ debt. The ombudsman found TMB's rejection of the final offer was reasonable given the mortgage term had ended and the balance was increasing, and that the auction sale was appropriate because professional valuers refused to value the property due to unsafe flooring and the short lease made it unmortgageable for most buyers.

The Ombudsman's reasoning

TMB was entitled to reject the negative equity sale application on the day of eviction because the mortgage term had ended, the balance was increasing, and the offer would not repay the mortgage in full. TMB had already shown forbearance by allowing several months to conclude a sale. Regarding the property sale, TMB was required to obtain the best possible price but this must be balanced against continuing interest accrual. Since professional valuers refused to value the property due to unsafe flooring and the short lease affected mortgageability, it was reasonable for TMB to sell at auction based on independent appraisals. The property risk assessment was not automated but a basic valuation report appropriate for TMB's decision-making purposes.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website