As part of the FCA’s ongoing work around coronavirus, finalised guidance was issued for mortgage lenders on how to deal with customers running into difficulties due to the pandemic.
The FCA set out the following ways in which mortgage lenders should deal with affected customers:
Consider the individual circumstances of customers, including any needs of vulnerable customers.
Contact customers in good time before the end of any deferral period, providing them with information about payment resumptions and how to access further support.
Where customers indicate that they are continuing to have difficulties, or they expect to continue to do so, the lender should work with them to resolve the difficulties before payments are missed.
Consider whether whole cohorts of customers should be offered short-term forbearance.
Unless a customer objects, firms may capitalise the deferred amounts.
Any shortfalls should not be treated in the same way as shortfalls arising under other circumstances, firms should consider carefully before starting any repossession proceedings in these circumstances.
This guidance followed on from previous guidance issued by the regulator earlier on during the pandemic. The FCA are keen to ensure that customers are treated fairly by lenders during the current situation. The FCA states that they will continue to review the guidance on a regular basis, with the intention to ensure that firms continue to assist customers to get back on track for as long as the current crisis continues. Although this guidance is not directly applicable to intermediaries, it is useful to know how lenders should currently be dealing with those having trouble repaying their mortgages.