Not upheld: mortgage term end, repossession, forbearance, term extension complaint against Bank of Scotland plc trading as Birmingham Midshires

Decision detail

Summary

Ms G complained that Birmingham Midshires treated her unfairly when her mortgage term ended in October 2021 by not offering a term extension and by starting legal action to repossess her property. Ms G had informed the lender she could not repay the mortgage and had no income due to Covid-19 pandemic impacts. Birmingham Midshires suggested Ms G complete an income and expenditure form but she declined and sought independent advice instead, stating her plan was to refinance. The lender allowed over three and a half years before starting legal action in April 2025. Ms G eventually completed the I&E form in November 2025, which showed she could afford the mortgage with an extended term, and the lender agreed to renew and extend it to 2030. The ombudsman did not uphold the complaint, finding the lender's forbearance was significant and reasonable, and that it could not offer modifications without Ms G engaging and providing financial information.

The Ombudsman's reasoning

The ombudsman found that Birmingham Midshires could not reasonably offer a term extension without Ms G providing financial information and engaging in discussions about her changed circumstances. The lender was entitled to expect repayment within a reasonable period. The three and a half years of forbearance provided by Birmingham Midshires before legal action was significant and reasonable. Ms G's claim of no arrears was rejected as the entire mortgage balance became due and overdue at term end, and the account had increased due to non-payment. Covid-19 restrictions and the Mortgage Charter did not apply to Ms G's situation. The lender was entitled to take legal action when it did.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website