The Financial Ombudsman Service has told a widow there is no evidence that Intrinsic Mortgage Planning knew her husband was borrowing more money than he had told her about.
A client, referred to as Mrs M, complained about an appointed representative of Intrinsic Mortgage Planning.
In her complaint and in a letter from her solicitors to the Financial Conduct Authority, she initially said IMP acted for her late husband in obtaining a bank loan, secured by a mortgage on their jointly-owned house, which she knew nothing about.
After her husband’s death she discovered the mortgage and that there were extensive arrears. The house was sold and the whole of the sale proceeds were used to repay the bank.
IMP said its fact-find recorded that Mrs M and her husband had attended a meeting and were looking to remortgage their house to raise money to repay unsecured debt.
It also recorded that the client owned an outright holiday home value of £175,000 and intended to use this as a vehicle to repay loan in addition to savings accumulated from his income.
The fact find also stated the client intended making capital repayments to the account within five to seven years and the additional borrowing would be used to repay a small credit card debt, but mainly to assist with the purchase of additional property as an investment.
Any additional property would also be considered as a vehicle to repay mortgage, the fact find stated.
IMP said it had recommended a mortgage and provided a key facts illustration, pointing out that the bank would not have accepted the application for a joint mortgage without both signatures on the application form.
The bank had issued a mortgage offer which was sent directly to Mrs M and her husband on 29 May 2007.
Their legal representative in respect of the joint re-mortgage would also have required both their signatures in order to complete the transaction, IMP noted.
IMP said it had asked the bank for copies of the documentation but the bank was unable to provide this information. The firm refused to uphold the complaint, stating Mrs M was at the meeting, had provided her passport and signed the joint application form for the re-mortgage.
Mrs M responded that the signature on the application had been forged and that she did not receive the key facts illustration or any other letter from IMP, or a mortgage offer from the bank.
However, following referral of the complaint to the Fos, Mrs M changed her position.
In a letter from her solicitors to the Fos she admitted she did know about the mortgage application, but her husband said it was for £20,000 to £25,000. She said that unbeknown to her it was increased to £62,000.
But Mrs M maintained she had not met with the IMP adviser and her signature on the declaration with the bank had been added fraudulently. In discussion with a Fos adjudicator, a lay representative of Mrs M said there had been much fabrication.
According to the lay representative, Mr M destroyed all letters and collected them from the post office to keep Mrs M in the dark about the debt they were in. The lay representative added that Mr M dealt with everything financially and Mrs M trusted him.
In a final decision, ombudsman Edward Callaghan said there was no evidence that IMP knew Mrs M’s husband was borrowing more money than he had told her.
“Mrs M admits she knew about the mortgage application. She says she understood from her husband that it was for £20,000 to £25,000, but there is no evidence that IMP was involved in this deception.
“There is no forensic evidence that Mrs M’s signatures on the application or the bank declaration were forged. Taking everything into account, I think it’s likely that Mrs M was misled by her late husband.”
emma.hughes@ft.com
