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- Also issued feedback statement and on feedback to draft guidance for mortgages.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.
- 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.
- This additional guidance will come into force on Sep. 16, 2020.
||UK FB; UK FCA
||Bank; BS; CRB; IB; MG Orig; Servicer
||Gd, PR, FS20/14, 9/14/2020
||Compliance; Financial; Product; Risk; Suitability; Treasury
||Banking; Loan; Mortgage
|Reg. Last Update
Last substantive update on 09/14/2020