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Mortgage complaints fall as FOS sounds alarm over interest-only

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  • 30/05/2018
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Mortgage complaints fall as FOS sounds alarm over interest-only
The Financial Ombudsman Service (FOS) reported a sharp drop in the number of new complaints it received related to mortgages in 2017/18, but noted worries over interest-only deals.

In its annual report, the Ombudsman said it received 8,917 new mortgage complaints, down 14% from the 10,428 from 2016/17.

The number of mortgage complaints upheld has also fallen over the same period, from 31% last year to 23%.

According to the Ombudsman report, one of the reasons that it has seen a fall in complaints related to mortgages has been a result of its work over the last few years “to help lenders treat customers fairly in light of stricter lending rules”.

However, the Ombudsman warned that the situation with interest-only mortgages is a concern, noting that it has heard from a number of borrowers who are nearing the end of their mortgage term and face losing their property.

It added: “In some cases, we decide the lender hasn’t been proactive enough in helping their customer, or hasn’t explored all the possible next steps.

“In others, we decide the lender has done what they can to help – even though the answer isn’t the one their customer was hoping for.”

 

Brokers shared too much information with estate agent

The Ombudsman’s annual review also includes details of a case it handled last year regarding a mortgage broker, who the complainant blamed for missing out on a flat they wanted to buy.

The seller’s estate agent had disregarded an offer made by the complainant after the broker said she’d been turned down for a mortgage.

The Ombudsman said that while brokers and estate agents will need to talk to each other, on this occasion they’d shared more information than necessary.

A separate investigation by the Information Commissioner’s Office found that the broker hadn’t complied with data protection rules either.

The Ombudsman said there wasn’t enough evidence to conclude that the broker’s actions had directly led to the borrower missing out on the flat, but noted its actions had caused the complainant to suffer “upset and embarrassment” and so ordered the broker to pay compensation to reflect this.

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