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    FCA Guidance Confirms Support for Mortgage Customers Amid Crisis

    June 02, 2020

    FCA updated its guidance confirming the support firms should give to mortgage customers that are either coming to the end of a payment holiday or are yet to request one. For customers still experiencing temporary payment difficulties due to the COVID-19 pandemic, firms will offer support, with options including a full or part payment holiday for a further three months. Customers yet to apply for a payment holiday have until 31 October 31, 2020 to do so. The guidance comes into force on June 04, 2020 and only applies to mortgages. It does not apply to consumer credit products that are covered by a separate guidance, which will be updated in due course. Unless renewed or updated, this guidance expires on October 31, 2020.

    FCA has confirmed the following in its guidance:

    • Customers that have not yet had a payment holiday and who experience financial difficulty have until October 31, 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 customers regarding what happens when their payment holiday ends. They 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 customers who have already had a payment holiday where they need further help. Firms should contact their customers to find out what they can repay 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.
    • Payment holidays offered under this guidance will not have a negative impact on credit files. However, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

    FCA is also reminding customers that if they can afford to resume payments, they should. Depending on the circumstances of customers, firms may make them aware of self-help steps a customer may take or signpost customers toward sources of debt advice. This will be for anyone concerned about managing their money during the ongoing crisis and wants to find out what steps to take to get back on track. When implementing this guidance, firms should be aware of the needs of their vulnerable customers and consider how they engage with them. Firms should help with access to alternatives for customers that are unable to use online services (such as digital channels) to access alternatives.

     

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    Keywords: Europe, UK, Banking, Loan Moratorium, Mortgage Lending, COVID-19, Guidance, FCA

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