Not upheld: mortgage application handling, alleged failure to progress application, alleged unfair treatment of vulnerable customer complaint against LONDON & COUNTRY MORTGAGES LIMITED

Decision detail

Summary

Mr R and Miss R complained that L&C issued a Decision in Principle for a mortgage, but after they paid a £3,000 deposit on a property, L&C closed the file without submitting an application to any lender, citing that the case was outside its appetite. Mr R argued L&C should have done more to support him as a vulnerable customer receiving disability benefits and should compensate him for the deposit risk and distress caused. The ombudsman found that a DIP is not a guarantee of lending, L&C had communicated early that Mr R's circumstances would be difficult to place, and L&C was entitled to decline to proceed. The only concession was a £50 payment for a minor administrative delay that L&C had already offered.

The Ombudsman's reasoning

The ombudsman found that a Decision in Principle does not constitute a guarantee of lending, and Mr R was not given to understand he could rely on being lent the amount stated in the DIP. L&C had communicated from the outset that Mr R's circumstances would make it difficult to find a lender. L&C is entitled to decide not to proceed with an application and is not obliged to submit applications to lenders or provide support to all potential clients. The fact that Mr R subsequently obtained lending elsewhere does not mean L&C acted unreasonably, as different lenders have different lending criteria. Regarding vulnerability, the ombudsman noted that L&C may not have been fully aware of the extent to which Mr R considered himself vulnerable and encouraged Mr R to raise this directly with L&C if he believes he made his vulnerability known.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website