Mortgage mix ups results in Ombudsman complaints

According to recent reports the Financial Ombudsman Service has been receiving a rising number of complaints with regards to mortgage bill mix ups, with many consumers complaining that they have been left with a hefty bill to pay after they thought that they had cleared their balance.

The reason behind this problem is because the consumers’ mortgage repayments have been set lower than they should have been, and this is known as under-funding. As a result of this many homeowners who believe that they have repaid their balances are left with outstanding debt, which some have disputed because they blame the lender for setting the repayments too low.

In order for the outstanding balance to be written off it has to be proven that it was the lender’s fault that the repayment was set too low, which could happen for reasons including quoting interest only payments by mistake or due to a miscalculation in mortgage repayments on the part of the lender.

However, the Ombudsman also has to take into consideration whether the consumer should have realised that the repayments that were being made were too low. One financial group is advising consumers to ensure that if they are hit with a bill for an outstanding balance when they thought they had cleared the mortgage they put in a complaint, as some lenders may try their luck and still try and get the outstanding balance of the consumer even though the mistake may have been on the part of the bank.

The Financial Ombudsman Service stated: ‘To decide what redress is appropriate, one of the issues we will consider is whether the lender is entirely to blame. This will involve our deciding whether the borrower should have known that they were not paying enough.’