Home repossession: what reasonable adjustments should mortgage providers make?
Green v Southern Pacific Mortgage Ltd
A woman who became unable to work because she was depressed asked her mortgage provider to transfer her from a repayment mortgage to an interest-only plan. This would have reduced her monthly payments sufficiently that her housing benefit would cover it. The mortgage company refused. She challenged their decision, arguing that they had discriminated against her by refusing to make reasonable adjustments on the grounds of her depression.
What (if anything) must a mortgage provider do to comply with the duty to make reasonable adjustments in the context of possession proceedings?
After losing her job, a woman claimed on an insurance policy to cover her mortgage repayments. Her claim was initially on the basis that she was unemployed and later that she was depressed and could not work.
When her insurance cover ran out, she was unable to meet the monthly repayments. Some months later the mortgage company began proceedings to repossess her home.
The woman applied to the mortgage company to transfer her repayment mortgage to one which was interest-only. This would have reduced her monthly payment sufficiently for her housing benefit to cover it.
Her request was refused. She brought a claim under the Equality Act, arguing that the mortgage company had failed to make reasonable adjustments on the grounds of her depression.
Why we were involved
Those with disabilities or long-term medical conditions face a range of additional challenges in everyday life. With thousands of homes repossessed each year, we wanted to clarify what reasonable adjustments a mortgage provider should make during possession proceedings.
Our goal is to ensure people’s life chances aren’t held back by the challenges in their way and we wanted to make sure that disabled people aren’t discriminated against by mortgage providers if they experience financial difficulties.
What we did
We used our powers to intervene in the case, which allows us to provide the court with expert advice or evidence. We advised the court on the approach it should take to the duty to make reasonable adjustments.
The case was unsuccessful. The judge found that the woman had not been put at substantial disadvantage on the grounds of her medical condition. The mortgage company’s refusal to transfer her to an interest-only mortgage was not discriminatory.
Who will benefit and how
Although this case was unsuccessful, it does helpfully clarify what the law expects of mortgage providers in making reasonable adjustments for disabled people who cannot keep up with their repayments. We will continue to fight to ensure the lives of disabled people are not held back and to support those who may have experienced discrimination.