Not upheld: Mortgage administration / arrears handling complaint against Bank of Scotland plc trading as Birmingham Midshires
Financial Ombudsman decision DRN-6438974 of 2026-06-18T00:00:00+00:00. Mortgage administration / arrears handling complaint against Bank of Scotland plc trading as Birmingham Midshires. Outcome: Not upheld.
Decision detail
| Reference | DRN-6438974 |
|---|---|
| Decision date | 2026-06-18T00:00:00+00:00 |
| Firm | Bank of Scotland plc trading as Birmingham Midshires |
| Product | Mortgage |
| Claim type | Mortgage administration / arrears handling |
| Outcome | Not upheld |
| Remedy | No remedy ordered. The ombudsman recommended that if Ms R is able to agree a formal sale of the property (with an offer checked by an independent estate agent as progressible and both sides agreeing to proceed) before repossession, Birmingham Midshires should allow three months for that sale to complete. However, the ombudsman stated it would not be fair and reasonable to allow further time before the lender takes action to recover the mortgage balance. |
Summary
Ms R complained about enforcement action taken by Birmingham Midshires on her mortgage, which she claimed was invalid due to alleged forgery and other technical defects. She took out the mortgage in August 2007 for £91,245 on an interest-only basis and went into arrears in February 2016, making no payments since March 2018. Birmingham Midshires obtained a court Order for Possession in December 2022 and pursued eviction proceedings. The ombudsman found that most of Ms R's complaints could not be considered as they were not referred within the required timeframes or involved matters for the courts to decide. On the issues that could be considered, the ombudsman found that Birmingham Midshires had acted fairly and reasonably, demonstrating considerable forbearance over eight years of non-payment, and that pursuing legal action and repossession was not unreasonable given Ms R's inability to resume payments and the erosion of equity through accumulating interest.
The Ombudsman's reasoning
The ombudsman found that Birmingham Midshires acted fairly and reasonably in pursuing legal action and repossession. The lender demonstrated considerable forbearance by allowing Ms R substantial time and space (over eight years) to get the mortgage back on track despite no payments being made. The ombudsman noted that forbearance is designed as a short-term measure to help get a mortgage back on track, not a permanent arrangement. Since Ms R was making no payments at all, it was difficult to see what forbearance options would have helped. The ombudsman rejected Ms R's arguments about mortgage enforceability, noting these are matters for the courts to decide, not the ombudsman. The ombudsman found that allowing the situation to continue indefinitely would only erode remaining equity and worsen Ms R's position. The lender's regulatory obligations do not require it to write off the mortgage, stop charging interest, or indefinitely forbear from taking action.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Bank of Scotland plc trading as Birmingham Midshires, all decisions | 10 | 20% |
| Mortgage administration / arrears handling, all decisions | 13,247 | 19% |
| Mortgage, all decisions | 24,695 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website