Not upheld: Mortgage administration / arrears handling complaint against Mortgage Agency Service Number Five Limited (MAS5)

Decision detail

Summary

Miss A complained about MAS5's administration of her interest-only mortgage, including alleged mis-selling, overcharging of interest, unfair arrears fees, incorrect credit file reporting despite SMI payments, and a transfer during an active complaint. The ombudsman found the complaint was not upheld, determining that MAS5 had exercised considerable forbearance in not taking legal action despite arrears from November 2022, that interest and fees were correctly applied under the contract, and that credit file reporting accurately reflected the arrears position where payments had not kept pace with accruing interest. The ombudsman confirmed MAS5 was contractually entitled to transfer the mortgage and that the arrears calculations were not demonstrably incorrect based on available evidence.

The Ombudsman's reasoning

The ombudsman found that MAS5 exercised considerable forbearance by not taking legal action despite arrears from November 2022, and that Miss A's financial circumstances did not support any affordable and sustainable concession. The arrears reporting on the credit file was accurate as it reflected that payments made had not cleared the arrears balance, with interest continuing to accrue faster than payments were made. The ombudsman confirmed MAS5 was contractually entitled to apply interest to the full balance including arrears, to apply fees (though only £42 was applied), and to transfer the mortgage regardless of the ongoing complaint. Payment allocation was correctly applied according to contractual priority.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website