Mortgage broker, Advance Mortgage Funding, must pay a former client more than £60,000 after an adviser provided unsuitable mortgage advice in 2009, the Financial Ombudsman Service has said.
In its decision the FOS said the client, Mrs M, used a loan to buy an overseas property with Harlequin with the intention of using the rent from the property to meet repayments.
The property was never constructed and Mrs M lost her money as a result. Advance Mortgage said it wasn’t required to give advice on the suitability of the investment but the FOS sided with the complainant.
Defending its decision, the FOS said the mortgage was not suitable for the situation
In a written final ruling on the case, ombudsman Sue Wrigley said she upheld the complaint because Mrs M she was not fully advised of the risks in repaying the mortgage.
Wrigley added: “Without the mortgage I don’t think Mrs M would have invested in the Harlequin property.
“She didn’t have any other savings or investments she could have used.
“So I think it’s more likely than not, that but for the unsuitable mortgage advice, Mrs M would not have invested in the overseas property and would not now be left with a mortgage she can’t afford to repay.”
The FOS said the only way to make the situation right is to put Mrs M in the position that had she never taken out the mortgage.
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