Not upheld: Mortgage administration / arrears handling complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr H complained that Halifax mismanaged a joint mortgage by giving excessive forbearance to the co-owner and failing to allow Mr H to sell the property. Mr H had moved out over 10 years ago but remained on the mortgage despite requests for removal. When arrears began in August 2022, the co-owner made partial repayments until June 2024, after which Halifax commenced legal action, obtaining a court order in November 2024 and repossessing the property in early 2025. The ombudsman found Halifax acted within regulatory requirements and had limited options in managing a joint mortgage where one party was making efforts to reduce arrears. The ombudsman concluded that interpersonal disputes between co-owners and Mr H's inability to reach agreement with the co-owner were outside Halifax's remit, and that Halifax appropriately signposted Mr H to independent legal advice.

The Ombudsman's reasoning

The ombudsman found that Halifax operated within regulatory requirements and had limited options as a mortgage lender in a joint mortgage situation. As long as one borrower was paying or reducing arrears, repossession action was unlikely to succeed, making earlier action impractical. Once legal action commenced, Halifax was constrained by court timelines. Halifax could not force one borrower to leave to allow the other to sell, and had to gain possession itself. Halifax appropriately signposted Mr H to independent legal advice and did not delay in its actions after June 2024. The interpersonal disputes between co-owners and Mr H's inability to reach agreement with the co-owner were outside Halifax's remit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website