Ombudsman decision - mortgage payment liability and credit file

fermi

Interesting decisions by the FOS that reinforces what we already know to be the case.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=24038

complaint

Mr L has complained that Derbyshire Home Loans Ltd has continued to hold him responsible for repayment of a mortgage for which he is no longer liable.

background

Mr L was made bankrupt in 2006. Prior to his bankruptcy he was a joint owner of a property that was mortgaged to Derbyshire Home Loans.

In 2008 Mr L’s trustee in bankruptcy sold his interest in the property to Mr L’s co-owner.

Mr L says that Derbyshire Home Loans continues to contact him regarding the payments due under the mortgage and is providing information to credit referencing agencies to the effect that he remains liable for payment of the mortgage.

our initial conclusions

Our adjudicator recommended that the complaint should be upheld. She considered that Mr L is not liable to meet the costs of the mortgage because of his bankruptcy.

Derbyshire Home Loans did not accept our adjudicator’s recommendation.

my findings

I have considered all the available evidence and arguments to decide what is fair and reasonable in the circumstances of this complaint.

I do not agree that Mr L remains liable to repay the mortgage. In this context it is necessary to distinguish between Derbyshire Home Loans’ right to enforce its security over the property, e.g. by exercising a power of sale, and Derbyshire Home Loans’ right to require
Mr L to repay the debt.

The right to enforce the security in the event of discharge from bankruptcy is preserved by section 281(2) of the Insolvency Act 1986.

However, section 281(1) says that where a bankrupt is discharged, the discharge releases him from all the bankruptcy debts.

This means that, although Derbyshire Home Loans is entitled to enforce its security over the property, Mr L is not liable to pay the monthly instalments and Derbyshire Home Loans should not be pursuing him for payment. In addition, as Mr L is no longer a legal owner of the property, he would not be affected by any action by Derbyshire Home Loans to enforce
the security.

It follows that, as Mr L is not liable to pay the mortgage, Derbyshire Home Loans should not be informing credit referencing agencies that he is liable.

my final decision

My final decision is that I uphold this complaint. In full and final settlement Derbyshire Home Loans Ltd should stop contacting Mr L regarding the mortgage and stop providing information about the mortgage in respect of Mr L to credit referencing agencies.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=48496

complaint

Mr F has complained that Bank of Scotland plc (trading as Intelligent Finance) continued to pursue him for payment of a mortgage for which he is no longer liable.

our initial conclusions

Our adjudicator recommended that the complaint should be upheld and that Intelligent Finance should pay Mr F £250 for distress and inconvenience.

Intelligent Finance did not agree with our adjudicator’s conclusions.

It says that Mr F remains liable to repay the mortgage.

my final decision

To decide what is fair and reasonable in this complaint, I have considered everything that Mr F and Intelligent Finance have provided.

I do not agree that Mr F remains liable to repay the mortgage.

The right to enforce the security in the event of discharge from bankruptcy is preserved by section 281(2) of the Insolvency Act 1986.

However, section 281(1) says that where a bankrupt is discharged, the discharge releases him from all the bankruptcy debts.

This means that, although Intelligent Finance is entitled to enforce its security over the property, Mr F is not liable to pay the monthly instalments and Intelligent Finance should not be pursuing him for payment.

I do, however, accept that, whilst Mr F remains a legal owner of the property, he would have to be named in any proceedings for possession.

I am satisfied that it is reasonable for Intelligent Finance to pay Mr F £250 to compensate him for the distress and inconvenience he has suffered as a result of Intelligent Finance’s refusal to accept that he is no longer liable to repay the mortgage.

My final decision is that I uphold this complaint.

In full and final settlement Bank of Scotland plc should: Pay Mr F £250; stop contacting Mr F regarding the mortgage, except insofar as this is necessary for the purpose of enforcing its security; and stop providing information about the mortgage in respect of Mr F to credit referencing agencies.

Under the rules of the Financial Ombudsman Service, I am required to ask Mr F either to accept or reject my decision before 11 November 2013.

signed: ***** ****** date: 10 October 2013 **** ombudsman at the Financial Ombudsman Service

The ombudsman may complete this section where appropriate – adding comments or further explanations of particular relevance to the case.

ombudsman notes

Mr F was made bankrupt in 2009. Prior to his bankruptcy he was a joint owner of a property that was mortgaged to Intelligent Finance. Mr F says that Intelligent Finance continue to contact him regarding the payments due under the mortgage. He says that he believes that Intelligent Finance may also be providing adverse information about him to credit referencing agencies.

IF

Bumping up the board for more views.

jpw123

is there a link to the ombudsman web site for the text above?

fermi

- Added extra example
- Corrected links

debt_doctor

Good to see some reasonable decisions from FOS - I've had some terrible decisions lately.


(terrible = they didn't agree with me!)


DD

bigjl

Paratus AMC continue to update my Credit File saying I owe them £30k.

The Ombudsman were of little help.

And appear to have allowed only the conversation they had with the Paratus AMC legal team to be considered.

So i still have a £30k default.

But I have it in writing that they are not going to chase the debt.

Just continue to ruin my credit.

fermi

Sadly the FOS is massively inconsistent and does not seem to employ many staff who are truly impartial or knowledgeable.It really can be complete pot luck on who you get looking at your case.

bigjl

Indeed Fermi.

In my case it appears the Ombudsman has allowed Paratus AMC to make their decision.

Pathetic and likely a pathetic attempt at revenge after I refused several times to sign a Dead of Acknowledgment for the shortfall.

They tried tricks and intimidation but thanks to information on this forum from persons, such as Fermi, that are in a position to keep people informed of their rights their dirty tricks didn't work.