FCA Confirms Continued Support for Those Struggling with Mortgages Due to Coronavirus
Recently we reported that the FCA was in talks with the government to possibly extend support for people who are having trouble paying their mortgage due to the coronavirus. We’re happy to say that the FCA has confirmed these people can get the financial help they need.
The coronavirus lockdown has led to many people losing their jobs, faced with reduced work hours, and more. As a result, finances are suffering, making it almost impossible for some mortgage customers to pay their bills.
If you’re currently having a hard time paying the mortgage, then there’s still help available. The FCA has announced that lenders can offer assistance in the way of a full or partial payment holiday for another three months. You’ll have until 31 October 2020 to seek help with your mortgage payments.
Christopher Woolard, Interim Chief Executive at the FCA, said, “The measures we have confirmed today will mean anyone who needs to get help from their lender if they are still struggling to pay their mortgage due to coronavirus.
“It is important that if a customer can afford to re-start mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.”
The FCA has confirmed:
- Customers who have not yet had a payment holiday, and who are in financial difficulties, have until 31st October 2020 to seek a payment holiday.
- Lender repossessions of homes are banned until 31st October 2020. If at that time people need to still self-isolate, the lender will need to ensure people have a way to comply.
- Mortgage lenders will need to communicate with their customers to discuss what will happen when the payment holiday ends. FCA is requiring that lender provide a range of options to deal with the missed payments—how they will be repaid and if customers are able to start making payments.
- Lenders still need to continue support for customers who already have a payment holiday if they need additional assistance. These firms will need to contact customers and find out if they can re-pay, and if so, then what amount. For those who are still in financial difficulties, then lenders will need to offer assistance, which can include an extension of the three-month or a partial payment holiday.
In addition, lenders will also be able to offer self-help steps for their customers or steer them towards debt advice services. This is good news for those who are still struggling to make ends meet. The extension will make it easier for mortgage customers to get back on track with their budgets and payments.
Not only that, but lenders are also advised to provide help for those customers who are able to access online services. In those instances, lenders will need to make alternative arrangements for customers to get the help they need.
The FCA’s guidance goes into effect on 4th June 2020, and only applies to mortgages. For other types of customer credit products, the FCA has said these will be covered under separate guidelines, which should be coming out soon.