Not upheld: mortgage possession and lender neutrality in joint borrower disputes complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr R complained that Barclays failed to take his jointly-held property into possession following his separation from Ms X in 2022 and subsequent missed mortgage payments from January 2023. Mr R wanted the property sold while Ms X, who remained in the property with their two children, wished to keep it. The ombudsman found that Barclays correctly remained neutral between the two joint borrowers and was entitled to explore all options before resorting to repossession as a last resort, in accordance with regulatory requirements. The ombudsman noted that Mr R's remedy for resolving the property dispute lay in the family courts through divorce proceedings, not in requiring the lender to force a sale. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Barclays was in a difficult position managing a joint mortgage where two equal customers had directly opposing wishes. Regulatory guidance requires repossession to be a last resort. Since Ms X was engaging with Barclays and exploring options to maintain the mortgage, Barclays was entitled to continue those discussions rather than move immediately to possession. The lender must remain neutral between joint borrowers and cannot be expected to favour one borrower's wishes over the other. The notification of divorce proceedings (Form A) was actually a reason to delay possession in hope of a financial order resolving the matter. Mr R's remedy lay in the family courts, not in requiring the lender to force a sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website