An early repayment charge was left off Ole’s redemption statement, leaving him short of funds to buy his new home.
What happened
Ole was selling his house. His solicitor contacted his lender and asked for a redemption statement to check how much he’d need to pay from the proceeds of the sale.
Ole based his calculations for his new mortgage on the lender’s statement. However, when the solicitor sent the payment, the lender said it wasn’t enough. There was a £1,500 early repayment charge that hadn’t been taken into account.
The lender apologised for the oversight, but said Ole was contractually required to pay the shortfall. This caused Ole a good deal of worry, as it meant he was short of funds to buy his new home.
Ole complained to his lender and, unhappy with its response, he came to us.
What we said
Fortunately, Ole had been able to renegotiate a lower price with the seller. But the situation had been stressful for him, and we thought his lender should do more than offer him an apology.
We upheld Ole’s complaint and told the lender to pay him compensation for the distress and inconvenience he’d experienced. We didn’t tell the lender to refund the early repayment charge, because Ole would always have had to pay that even if the lender hadn’t made a mistake.