Mortgage complaints to ombudsman on the rise

Posted:

4 July 2012

Complaints to the Financial Ombudsman regarding mortgages have risen sharply in the last fiscal year.

During 2011/12, the ombudsman received 9,537 expressions of dissatisfaction — an increase of over a third from the previous year.

Furthermore, in the first quarter of this financial year, between April and June, an additional 2,234 complaints were heard. 11,000 enquiries were made to the ombudsman’s consumer helpline.

A third of complaints to the helpline had to be prioritised due to the callers experiencing “severe financial difficulties”.

The causes of disquiet among consumers included difficulty with making payments on time and extra charges added to their mortgage balance.

The watchdog also reported that it sees many cases where a complaint is left too late and too many repayments have already been missed, making it tricky to put things right.

A smaller number of complaints have been received in regard to cases where failure to make payments has resulted in repossession of a home.

The ombudsman said that although there is an obligation on lenders to treat their customers sympathetically and make “reasonable attempts” to agree a repayment plan, this requires co-operation from the customer. It stressed that although it is successful in resolving many disputes, it is not able to overturn the decision of a court of law.

“People are often anxious and emotional when they bring us a problem relating to mortgage arrears and hardship,” a spokesman for the Financial Ombudsman said.

“These cases are among the most distressing that we see for a consumer, with fear of losing their home at the forefront of their mind.”

Millions of homeowners saw their mortgages rates increased by lenders in May, with the lenders citing the weak economy as a reason, as well as the increased cost of funding a mortgage.