UK FCA Mortgage Borrower Support

On Sep. 14, UK FCA confirmed next stage of support for mortgagors.

  • UK FCA has confirmed the next stage of support that mortgage borrowers will receive if they continue to face payment difficulties due to the coronavirus pandemic.
  • Also issued feedback statement and on feedback to draft guidance for mortgages.
  • Follows, UK FCA Aug. 2020 proposed guide on mortgage relief for Covid, see #84773.
  • Guidance
  • FCA issued finalized guidance for firms, to ensure consumers who have benefitted from payment deferrals but still face financial difficulties continue to get support they need.
  • As well as those whose situation may be newly affected by Covid after guidance ends.
  • Firms will offer further short, longer-term support reflecting customer circumstances.
  • This could include extending the repayment term or restructuring of the mortgage.
  • Where consumers need further short-term support, firms can offer arrangements for no/reduced payments for a specified time to give customers time to get back on track.
  • Firms will also signpost borrowers to the support they need in managing their finances.
  • Including self-help, money guidance, or refer borrowers to debt advice organizations.
  • Credit Files
  • Where borrowers take payment deferrals and require further support from lenders arrangements can be reflected on credit files as per the normal reporting processes.
  • Also applies to borrowers affected by Covid who receive lender support after Oct. 31.
  • This will reduce the risk of unaffordable lending; firms are required to be clear about the credit file implications of any forms of support offered to borrowers.
  • Previous Guidance
  • FCA’s Jun. 2020 guide will apply to those impacted by Covid until Oct. 31, 2020, with consumers able to take a first or second three-month payment deferral until this date.
  • Follows UK FCA Jun. 2020 updated guidance on mortgages during covid, see #78925.
  • Sep., 2020 guidance ensures consumers can obtain the support they need from their lenders after payment holiday ends or they are newly affected by Covid after Oct. 31.
  • UK FB Response
  • UK FB responded to UK FCA's guidance on ongoing support for mortgage customers.
  • Reiterated the banking and finance industry’s commitment to support those mortgage borrowers who continue to face payment difficulties due to the coronavirus pandemic.
  • Said latest figures show lenders have granted over 2mn mortgage payment deferrals.
  • Effectiveness
  • This additional guidance will come into force on Sep. 16, 2020.

Regulators UK FB; UK FCA
Entity Types Bank; BS; CRB; IB; MG Orig; Servicer
Reference Gd, PR, FS20/14, 9/14/2020
Functions Compliance; Financial; Product; Risk; Suitability; Treasury
Countries United Kingdom
Products Banking; Loan; Mortgage
Regions EMEA
Rule Type Final
Rule Date 9/14/2020
Effective Date 9/16/2020
Rule Id 86063
Linked to Rule :84773
Reg. Last Update 9/14/2020
Report Section UK

Last substantive update on 09/14/2020