The FCA has confirmed the support mortgage borrowers will receive if they continue to face payment difficulties due to coronavirus. The guidance covers those who still face financial difficulties, as well as those whose financial situation may be newly affected by coronavirus after the current guidance ends.
The measures mean lenders will need to offer further short and longer-term support reflecting the circumstances of their customers. This could include extending the repayment term or restructuring of the mortgage. Where consumers need further short-term support, firms can continue to offer arrangements for no or reduced payments for a specified period to give customers time to get back on track. This additional guidance will come into force on 16 September 2020.
Under the guidance, firms will prioritise support for borrowers who are at most risk of harm, or who face the greatest financial difficulties. The new guidance reinforces the need for firms to deliver outcomes that are right for individual borrowers rather than adopting “one size fits all” solutions. The FCA will be monitoring firms to ensure borrowers are treated fairly having regard to their individual circumstances. Firms will also signpost borrowers to the support they need in managing their finances, including through self-help and money guidance, or refer borrowers to organisations that can provide free debt advice if this meets their needs and circumstances.
Where borrowers have taken, or are taking, payment deferrals under the FCA's existing guidance and require further support from lenders, these arrangements will be reflected on credit files. This also applies to borrowers newly affected by coronavirus who receive support from their lender after 31st October. Lenders are required to be clear about the credit file implications of any forms of support offered to borrowers.
The FCA’s current guidance published in June will continue to provide support for those impacted by coronavirus until 31st October 2020 – with consumers able to take a first or second three-month payment deferral until this date. The FCA says it will keep the guidance under review and if circumstances change significantly, consideration will be given to any further measures that may be needed to support consumers during the ongoing pandemic.
Christopher Woolard, interim chief executive at the FCA, said: “Some consumers will continue to be impacted by coronavirus in the coming months, or be impacted for the first time. Consumers in these situations will benefit from firms providing them with tailored support. However, it is very important that consumers who can afford to resume mortgage payments should do so for their own long-term interests and so that help can be targeted at those most in need.