FCA COULD EXTEND MORTGAGE PAYMENT HOLIDAYS FOR CORONAVIRUS

blog header image

Posted : 24 Mar 2020 at 18:11:42
Category: Corona Virus News

Share this article

The Financial Conduct Authority (FCA) has laid out how firms should be implementing the package of announcements from government about mortgage payment holidays for those affected by Covid-19.

It added that the guidance will be reviewed within the next three months and payment holidays could be extended if appropriate.

“We will review this guidance in the next three months in the light of developments regarding coronavirus and will issue amended guidance extending the period of the payment holiday if appropriate,” it said.

The regulator emphasised that those taking a holiday should see no impact on their credit score and that firms should not be investigating the reason for requesting the loan.

Borrowers currently in arrears should not be treated any differently to those who are fully up-to-date with their payments.

And lenders should be proactive in discussing a payment holiday if customers suggest they could potentially face payment difficulty.

The regulator added that it could take how firms used the payment holiday when it came to future enforcement cases.

In its published guidance, the FCA said: “A firm should give customers adequate information to understand the implications of a payment holiday, including the consequences (if any) for the total amount payable under the mortgage contract, the term of the mortgage contract and the amount of contractual monthly instalments.”

It added: “A firm may decide to put in place an option other than a three-month payment holiday, if it is appropriate to do so in the individual circumstances of the case and it is in the best interests of the customer.

“This could include a payment holiday of fewer than three months, if the customer requests a shorter payment holiday. This guidance does not prevent firms from providing more favourable forms of assistance to the customer, such as reducing or waiving interest.”

Repossessions

For repossessions, the FCA made it clear that firms should not commence or continue repossession proceedings against customers at this time, “given the unprecedented uncertainty and upheaval they face, and government advice on social distancing and self-isolation”.

This applies irrespective of the stage that repossession proceedings have reached and to any step taken in pursuit of repossession.

It added that where a possession order has already been obtained, firms should refrain from enforcing it.

“We consider that commencing or continuing repossession proceedings at this time is very likely to contravene Principle 6 and MCOB 2.5A.1R – absent exceptional circumstances (such as a customer requesting that proceedings continue),” it said.

“We will not hesitate to take appropriate action where necessary.”

Firms should also ensure that their customers are kept fully informed and discuss with them the potential consequential impacts of suspending any moves towards repossession.

Treat customers fairly

Throughout all this, the FCA highlighted that the guidance builds on obligations by firms under Principle six of its rules and MCOB 2.5A.1R to act in the interests of customers and treat them.

Interim chief executive Christopher Woolard said: “We want to help firms support consumers during these unprecedented times.

“Our mortgage guidance underpins the actions taken by mortgage providers and will give confidence to both consumers and firms. In particular, we are making it clear that no responsible lender should be considering repossession as an appropriate measure at this time.

“Small businesses can be confident that their access to funds can be based on how their business has performed in the past and its future prospects – not its position today.”

LATEST SIMILAR NEWS

DEBENHAMS TO START REOPENING SHOPS AFTER LOCKDOWN
Posted on: 04 Jun 2020 at 15:49:47
Debenhams is to reopen its first stores in Northern Ireland on Monday, followed by 50 shops in England the week after. It says three stores with street access in Belfast, Newry and Rushmere will be able to open following updated guidance from the NI Executive. Debenhams collapsed into administration...
PUBLIC SCHOOLS BEGIN TO REOPEN
Posted on: 01 Jun 2020 at 17:02:43
As of this week, many schools in England were given the all clear to open to all students, though parents remain wary of sending their children back to school. Whilst in some areas, schools have remained closed to non-essential worker children, many schools have opened to children in reception, year...
NHS DOCTOR REVEALED AS ANTIBODY 'SUPER-DONOR' AFTER COVID-19 RECOVERY
Posted on: 27 May 2020 at 09:38:36
Alessandro Giardini, who spent a week in intensive care, has an antibody level in his plasma around 40 times that of the average. The discovery was made as part of an NHS trial to analyse the blood of 435 covid-19 patients. Mr Giardini, a consultant in the cardiology department of Great Ormond Stree...
CORONAVIRUS: IMMUNE CLUE SPARKS TREATMENT HOPE
Posted on: 22 May 2020 at 12:05:21
UK scientists are to begin testing a treatment that it is hoped could counter the effects of Covid-19 in the most seriously ill patients. It has been found those with the most severe form of the disease have extremely low numbers of an immune cell called a T-cell. T-cells clear infection from the bo...
HAMPSHIRE AND ISLE OF WIGHT AIR AMBULANCE JOIN FORCES WITH COAST GUARD TO HELP TRANSFER PATIENTS DURING CORONAVIRUS OUTBREAK
Posted on: 20 May 2020 at 08:49:31
Hampshire and Isle of Wight Air Ambulance  are collaborating with HM Coastguard, the search and rescue arm of the Maritime Coastguard Agency, in order to safely transfer time critical patients with an unknown coronavirus status from the Isle of Wight to hospitals on the mainland. Doctors and s...
CORONAVIRUS: JOBLESS CLAIMS SURGE BY RECORD 856,500 IN APRIL TO HIGHEST LEVEL SINCE 1996
Posted on: 19 May 2020 at 11:18:08
Official figures have shown an increase of 856,500 people submitting benefit claims last month as the coronavirus crisis took its toll on jobs. The update from the Office for National Statistics (ONS) showed the so-called claimant count, measured through Universal Credit applications, at its highest...