Updated guidance includes extension of mortgage holidays for three months and continuation of ban on lender repossessions until 31 October 2020
The Financial Conduct Authority (FCA) has confirmed the support that mortgage firms should give to homeowners who are struggling to pay their mortgage due to the coronavirus (COVID-19) outbreak.
In updated guidance - which comes into effect on 4 June 2020 - the FCA confirms that -
- homeowners that have not yet had a payment holiday and who experience financial difficulty have until 31 October 2020 to request one;
- the current ban on lender repossessions of homes will be continued to 31 October 2020 - this will ensure people are able to comply with the government’s policy to self-isolate if they need to;
- firms will communicate with homeowners regarding what happens when their payment holiday ends and should offer a range of options for how the missed payments will be repaid, if they are able to resume payments;
- lenders will continue to support homeowners who have already had a payment holiday where they need further help - firms should contact their customers to find out what they can re-pay and, for those who remain in temporary financial difficulty, offer further support, which will include the option of a further three-month full or part payment holiday;
- although payment holidays offered under this guidance will not have a negative impact on credit files, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.
The FCA also says that, when implementing the guidance, firms should be particularly aware of the needs of their vulnerable customers and consider how they engage with them, and that, for customers who aren’t able to use online services (such as digital channels), firms should make it easy for customers to access alternatives.
For more information, see FCA confirms support for customers who are struggling to pay their mortgage due to coronavirus from fca.org.uk