Self-cert court case against Godiva goes to mediation

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Godiva Mortgages and the pensioners suing the lender for £400,000 over a self-certification interest-only mortgage have agreed to mediation to try and avoid a full-blown trial.

Norma and Robert Mason began suing the Coventry Building Society arm in April 2013 over a mortgage taken out in 2008, before self-cert loans were banned by the regulator.

The case had its first court hearing on 9 May, by which point Godiva had already incurred legal costs of £241,000 through law firm Eversheds.

The Masons are representing themselves through a family member who is not a lawyer.

The case is now set to move to mediation in September to give both sides a chance to settle their differences.

If mediation is unsuccessful then the case will proceed to a three-day trial.

Godiva would not comment on the mediation plans.

Papers filed at the High Court by the Masons in 2013 say the couple kept up the interest payments on their loan but could not repay Godiva when the loan ended in 2013.

They say they are out of pocket, that the lender should not have lent to them and that it did not check their ability to repay.

The couple qualified for a self-cert loan because they were classed as self-employed due to owning property development company Mason Homes.

Godiva says the Mason’s application form says they earned £200,000 a year joint income from Mason Homes the year before the mortgage, qualifying them for the large loan.

However, the Masons claim Mason Homes actually made no profit in the period, that Godiva should not have lent to them and that they are now out of pocket.

But Godiva’s defence says the Masons could sell the property and repay the loan.

The lender says the Masons took out the loan with advice from Access Business Finance, and that the couple signed a form stating the broker was not an agent of the lender.

Godiva’s defence papers say the lender was not responsible for the advice the Masons received.