Not upheld: mortgage administration, legal costs charging, and failure to pause legal action complaint against Santander UK Plc

Decision detail

Summary

Mr O complained to the FOS about his mortgage with Santander, disputing the balance calculation, the addition of legal costs following a 2022 court order stating 'No order as to costs', and Santander's refusal to pause legal action in 2025 when he requested breathing space due to a close family member's illness and subsequent death. The ombudsman found that the mortgage balance was correctly calculated with arrears and legal costs properly applied, that 'No order as to costs' did not prevent Santander from adding legal costs, and that Santander's decision to continue legal action was reasonable given the circumstances and the need to prevent further deterioration of Mr O's financial position. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the mortgage balance was correctly calculated with arrears and additional interest properly applied. The court order stating 'No order as to costs' did not mean each party paid their own costs; rather, it meant the court made no ruling, allowing Santander to operate the contract normally and add legal costs to the mortgage balance. The legal costs charged were not excessive and did not require detailed justification. Santander had provided multiple redemption statements, so it had not refused to provide settlement figures. Regarding the 2025 request to pause legal action, while the ombudsman acknowledged Mr O's difficult circumstances, Santander's decision was reasonable because continuing arrears would further erode Mr O's equity in the property, worsening his long-term financial situation. The lender must consider the customer's broader interests, not just immediate preferences.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website