Mediation case studies

Joanna and her ex-husband Stephen made a complaint because their bank would not agree to take Joanna off their joint mortgage.

They had bought a house together when they got married but they then separated. As part of their separation and divorce the court decided that Stephen would keep the house, continue to pay the mortgage (he had been paying the majority already) and that Joanna would give up her interest in the property.

However, their bank refused to take Joanna off the mortgage. The bank said that the mortgage contract made them both responsible for the mortgage, meaning that if one party is unable to, or is unwilling to pay the mortgage, the other is still fully liable for the debt. The bank also said that Stephen’s total income was not enough to carry the mortgage on his own under current lending rules.

When the couple first took out the mortgage, some years earlier, the lending rules had been less strict, but under the current, tightened Central Bank rules, Stephen did not qualify to hold the mortgage on his own. Although Joanna and Stephen were on good terms, they had both remarried, and they felt this situation was having a major hold over their lives.

During mediation, the bank said that it could not reduce the security it had on the mortgage but said it would consider taking Joanna off the mortgage if Stephen’s income increased to a point where he could prove he could afford to pay the loan on his own.

Joanna and Stephen accepted this position and closed their complaint.