Ombudsman's verdict offers hope for homeowners who are battling to keep a roof over their heads. A remarkable ombudsman victory for a householder who had his home repossessed after being mis-sold a hefty mortgage could set a precedent, preventing others from losing their properties as the recession bites, lawyers say.
This year an estimated 75,000 families - against 40,000 last year - will lose their homes, according to the Council of Mortgage Lenders (CML).
But many who face handing back the keys could be helped by rules covering "suitable advice" for borrowers, buried in the handbook of the Financial Services Authority (FSA), the City regulator.
Andrew Brown (not his real name) struggled to repay his mortgage but subsequently took his mis-selling case to the Financial Ombudsman Service, and has now won. Despite turning to the FOS late on and being repossessed, he will receive compensation - while other borrowers who begin cases at an earlier stage than he did might well be able to save their homes too.
A housing association tenant, Brown had the valuable promise of a rent fixed for life. However, a mortgage adviser persuaded him to buy the property and failed to consider "what would happen when the attractive discounted rate [set up on that mortgage] ended", according to an FOS spokeswoman.
Brown was repossessed and had to move; he then lodged a complaint with his mortgage adviser and ultimately brought the case to the FOS. |
£1,431.76 from Citi Financial