DRN-4575956 – Time taken to respond to a shortfall settlement proposal; complaint not upheld
What happened: An interest-only mortgage where the borrower arranged an equity release agreement with another provider that would not cover the full balance owed to Rooftop. She asked Rooftop to accept a shortfall of roughly £14,000, initially in February 2023, and on 7 April 2023 proposed repaying it at £500 per month on an unsecured basis. She told Rooftop she needed an answer by 12 May 2023, when the equity release offer expired. Rooftop conducted a new income and expenditure assessment on 20 April 2023 and confirmed acceptance on 12 May 2023 by telephone and by email sent at 11:12 am. The borrower was unable to confirm the equity release offer in time and the replacement offer was £10,000 lower.
What the Ombudsman decided: Complaint not upheld.
The published decision records that the complaint was not upheld.
What mattered to the Ombudsman
- That a lender is not obliged to accept a shortfall at all
- That the lender needed an up-to-date income and expenditure assessment before it could properly consider the proposal
- That acceptance was communicated on the date the borrower had asked for
- That the borrower could have finalised the proposal sooner
These are the factors this particular decision treated as important. Ombudsman decisions are not precedent and another case can turn out differently.
What this does not prove
It does not set a general time limit for answering settlement proposals, and it does not decide whether the borrower's loss was avoidable in other circumstances.
Source details
- Source type
- Financial Ombudsman Service decision
- Source
- Financial Ombudsman Service, final decision DRN-4575956 (Ombudsman: Paul Cooper)
- Date
- 10 May 2024
- Reference
- DRN-4575956
- Mortgage type
- Residential
- Jurisdiction
- United Kingdom
- Organisations
- Rooftop Mortgages Limited
- Source quality
- Official source
- Last checked
- 2 September 2026
- Added
- 2 September 2026
What happened
An interest-only mortgage where the borrower arranged an equity release agreement with another provider that would not cover the full balance owed to Rooftop. She asked Rooftop to accept a shortfall of roughly £14,000, initially in February 2023, and on 7 April 2023 proposed repaying it at £500 per month on an unsecured basis. She told Rooftop she needed an answer by 12 May 2023, when the equity release offer expired. Rooftop conducted a new income and expenditure assessment on 20 April 2023 and confirmed acceptance on 12 May 2023 by telephone and by email sent at 11:12 am. The borrower was unable to confirm the equity release offer in time and the replacement offer was £10,000 lower.
What the borrower complained about
The borrower said Rooftop responded to her settlement proposal too late, and that this caused her to lose the original equity release offer and incur an additional £10,000 cost.
What Rooftop said
Rooftop did not consider it had done anything wrong in how it handled the proposal. It said it had queried the affordability of the offer against the October 2022 income and expenditure assessment, and that it telephoned and emailed its acceptance on 12 May 2023.
What the Ombudsman decided
The Ombudsman recorded that a lender is not obliged to accept a shortfall, that the borrower was asking Rooftop to accept £14,000 less than she was contractually obliged to repay and to allow that sum to be repaid unsecured, and that Rooftop only had enough information to consider the proposal properly once the new income and expenditure assessment was completed. He found Rooftop's call notes persuasive, that acceptance had been communicated within the timeframe requested, and that the borrower could have finalised her proposal and updated Rooftop's understanding of her finances sooner.
Outcome
- Complaint not upheld.
Key extracts
“a lender such as Rooftop isn't obliged to accept a shortfall such as Ms F was requesting here”
Ombudsman, final decision DRN-4575956
“it was only on 20 April 2024 that Rooftop had enough information to give Ms F's proposal proper consideration”
Ombudsman, final decision DRN-4575956
Why this record may be relevant
This decision concerns what financial information a lender may ask for before responding to a settlement or shortfall proposal, and how the time taken is assessed.
Source
Financial Ombudsman Service, final decision DRN-4575956 (Ombudsman: Paul Cooper)
View original sourceThe date shown is the date stated in the published decision by which the consumer was required to accept or reject it. The published decision refers at one point to "20 April 2024" in a passage otherwise concerning April 2023; the date is reproduced here as printed.
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