The Financial Ombudsman Service has attributed rising numbers of mortgage-related complaints to the increased publicity around tougher lending rules introduced under last year’s Mortgage Market Review.
Yesterday (25 August), Fos data for the first six months of this year saw Bank of Scotland topping the list with 897 complaints during the last six months, with an uphold rate of 31 per cent, although this figure was down from 1,004 during the previous six months.
However, Santander followed with 708 complaints, up from 572, with an uphold rate of 38 per cent, while Legal and General had 621 complaints, up from 396, with an uphold rate of 27 per cent and Barclays had 597, slightly more than the 590 complaints it received in the prior period, with an uphold rate of 41 per cent.
A spokesperson for the Fos said: “With the increased publicity around tighter lending criteria in the wake of the Mortgage Market Review, it is perhaps inevitable that our latest complaints data shows a steady rise in the number of mortgage complaints at the ombudsman.”
While several of the banks in the top five declined to comment, a spokesman for Lloyds Banking Group responded that it had 1,191 mortgage complaints referred to the Fos in the first half this year, compared to 1,359 in the second half of 2014.
“Before the MMR came into force we put considerable resource into developing our processes to ensure that we could meet the needs of our customers.
“As a result, after an initial small increase immediately after the introduction of the MMR, Lloyds Banking Group is now seeing mortgage complaints levels fall.”
David Hollingworth, London and Country Mortgages’ associate director for communications, agreed that the MMR’s impact was a likely cause.
“Certainly an area that can cause borrowers a good deal of consternation is something like porting. Lenders will reassess the borrower’s ability to afford the mortgage, so even where the borrowing is not being increased, some borrowers will be refused the ability to take the mortgage to a new property because they fail to meet the current criteria.
“Lenders have always taken this approach but with such a change in lending criteria in recent years the problem is magnified.”
He added that other areas that will find borrowers facing enforced changes would be interest only, or perhaps older borrowers where lender maximum age has been tightened substantially.
“I certainly expect that it will be market conditions that has led to the increase rather than decline in sales quality, for example.”
peter.walker@ft.com
