FCA proposes next stage of mortgage support
The Financial Conduct Authority (FCA) has announced new proposals to ensure that firms provide "tailored support" to mortgage borrowers who continue to face payment difficulties due to the COVID-19 crisis.
The draft guidance proposes that firms should consider a range of options to support customers based on their circumstances, such as extending the repayment term, restructuring the mortgage, or arranging to pause or reduce payments for a specified period.
In March, the Government announced that mortgage lenders would be offering a three-month payment holiday to anyone struggling financially because of the pandemic.
This was extended in May for those still struggling, and the application deadline was extended to 31 October.
According to the FCA, the majority of customers who have had a payment holiday are now expected to resume full repayment, but many will remain in financial difficulty.
The FCA said it expects the current guidance to expire on 31 October, but will keep this under review depending on how the wider situation develops.
Christopher Woolard, interim CEO at the FCA, said:
"It is important that consumers who can afford to resume mortgage payments should do so. However, we understand that borrowers facing payment difficulties because of the pandemic will continue to face uncertainty and may also experience temporary interruptions in income.
"We are proposing that firms contact their borrowers in good time before the end of a payment holiday, and work with them to come up with a tailored plan to help get them back on track. Firms should not take a ‘one size fits all' approach."
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