Former wife’s approval needed to change joint loan

Concerns about lending decisions,
John and Maureen had owned a home together for 16 years. Then the couple separated and Maureen moved out. They disagreed about what should happen to the home. John wanted to retain the property, while Maureen wanted the property to be sold, and the proceeds to be shared between them. Maureen was not contributing to the loan payments and John was unable to make the loan payments by himself. He struggled to keep up, but the loan went into arrears. John wanted the bank to agree to put the payments on an interest-only basis and to extend the term of the loan. Maureen did not agree to this.
September 2019

The bank advised John that it was not able to act on his instructions alone given that the parties were in dispute.  John said that under the mandate, either borrower could give instructions to the bank.  Further, the bank had acted on his sole instructions in the past. 

John complained to us that despite the fact that he was experiencing financial hardship, the bank refused to alter the loan terms as he had requested.  He also said it was unreasonable for the bank to require Maureen’s consent to any changes to the loan given that she was not contributing towards the loan payments. 

Our investigation

We reviewed the loan agreement and it provided that the bank was not bound to act on individual instructions.  We were not able to find that the bank had acted inappropriately in exercising its discretion to decline to act on John’s instructions alone.  Given the bank was on notice that there was a dispute about the future of the property and the payments on the loans, it was reasonable for the bank to require joint instructions before considering whether it would agree to any changes to the joint lending arrangements. 


We did not uphold John’s complaint.


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