Lost his job and could not pay the mortgage. The bank then demanded full repayment: NOK 3.6 million

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Here you can read what you should do when life changes and you are unable to pay your loan as before. (link)

One of the most important things you should do is contact the bank – and you should do it as early as you can.

So did “Martin”, the loan customer we are going to talk about in this case. And even though the bank in this case first put up a hard fight, the customer actually won in the end – and he did not have to shell out NOK 3.6 million.

Lost his job

Martin ended up financially disabled when he lost his job. In addition to the mortgage, he also had many unsecured loans. Unsecured loans are consumer loans or credit debt for which no security is required, such as mortgages.

He contacted the bank and told them about the problems – and at the same time stated that he would try to sell the house.

The bank, for its part, sent payment reminders for several installments and eventually summed up to five unpaid installments and many reminders and debt collection notices. In the end, the bank considered the loan to be “significantly defaulted” – and demanded the man for the entire mortgage, which was NOK 3.6 million.

That the man later himself came on the field and paid what he had the opportunity to, did not help: the bank considered that the loan in its entirety had fallen due for payment.

At the same time, it turns out that there are several outlay businesses on the property. You can get an outlay business against you if you owe some money and they ask the bailiff for forced recovery.

– Not my fault

The case has been pending before the Financial Complaints Board, which handles complaints against banks, insurance companies, debt collection companies and other financial companies.

There, Martin disagrees with the bank’s assessment that the loan was significantly defaulted. He believes that the bank was not in its right to terminate the loan agreement and demand repayment of the entire loan – and he claims that the collection costs must be deleted.

– Complainants consider that he is not to blame for what has happened because the employer stopped sickness benefits and unemployment benefits for three months. When these were resumed, the complainant paid down on the loan what he could, writes the Financial Complaints Board in the case documents.

The bank disagrees and believes they were in their full right to cancel the loan.

Two missing installments are not “material default”

The Financial Appeals Board gives Martin full support in the case. They write in the decision that the question of “significant default” will depend on the duration of the default, the number of defaulted terms, the extent of the default in absolute krone amount and in relation to the size of the debt and previous default.

The Financial Appeals Board believes that what has been proven in this case is that there is talk of two defaulted deadlines – which is not enough for there to be talk of “significant default”:

– Two defaulted terms are in principle not enough for there to be a material default. Although the bank provides information on many previous reminders and debt collection notices, the tribunal finds that the condition for early maturity was not met.

The tribunal believes that the bank has also made several formal errors in relation to the notices that have been sent.

– The tribunal’s conclusion after this is that the bank does not have the right to demand full repayment of the outstanding debt, they conclude, and thus uphold Martin.

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