Who can you complain to if unfairly treated by lender?

Minnie-the-Minx_2

I have a friend who has a mortgage problem and would be grateful for any suggestions I can pass on to her.

She had a long period of unemployment and for a time her mortgage was part paid by benefits (sorry, can't remember what it is called but it is the mortgage help one that gets paid straight to the lender).

She has now been working for about a year and has paid the mortgage herself in full and on time each month. The fixed rate she was on expired some months ago and the lender have transferred her to the standard variable rate and refuse to give her a new fixed rate.

It is a substantial mortgage so the cost is crippling and she now doesn't make ends meet.

Each month she rings them and asks if she can have a new fixed rate and each month they say 'no', call back and ask again next month. She has written to them asking that they look at her situation and either change the rate or at least give her some idea what she needs to do to qualify for a lower rate. They have replied that they cannot reduce the rate now and the criteria they use are confidential so they cannot tell her what she needs to do.

They have said that she can contact their hardship department if she is having a problem paying but it is actually only their ridiculous high rate that is giving her a problem. If they put her on a fixed rate she would manage quite comfortably.

She doesn't have a big enough salary to qualify for a mortgage with a new lender so is stuck with them.

Apologies for the lengthy post... is there anything she can do? If they won't budge, is there some governing body or mortgage authority she can appeal to? I think they are being totally unreasonable in their treatment.

Thrugelmir

Minnie-the-Minx wrote: »

She doesn't have a big enough salary to qualify for a mortgage with a new lender so is stuck with them.

Same applies to existing lender. The interest rates on offer will reflect the risk. Suggest other avenues are explored if finances are tight.

ValHaller

Thrugelmir wrote: »

The interest rates on offer will reflect the risk

In this case, the risk is brought about by the interest rates.

ILW

Sell up and downsize.
She is living in a house she cannot afford.

Thrugelmir

ValHaller wrote: »

In this case, the risk is brought about by the interest rates.

Given that interest rates are in relative terms extremely low. Then I suspect not. Normally there's far more to the personal situation that never gets disclosed.

holly_hobby

The benefit she recd was SMI - Support for Mortgage Interest.

Under FSA regs, a lender must actively engage with a mortgagor whom is facing payment difficulties - I suggest that your friend contact their "hardship" dept as advised in her original call to the lender, to start some positive mediation.

However, it may well be a case that she simply can't afford to live there now she is not enjoying a preferential rate - which to be fair is not really an issue of the lender more the mortgagor, and which may dicate her having to sell, if she is unable to secure a lower payrate elsewhere via a remortgage.

Hope this helps

Holly

opinions4u

They are under no obligation to offer an alternative product.

Goldiegirl

If she wants to complain to the Ombudsman she would have to go through the lenders complaints procedures first.

If she did not get a solution that she was happy with after going through the complaints procedure, she could then go to the Ombudsman.

However, I can't see that there is any complaint to uphold. It's not that she's being treated unfairly - it seems to be that the lender isn't doing what she wants.