Regulatory AlertsFS20/17: Mortgages and coronavirus: Updated Payment Deferral and Tailored Support Guidance for Firms
The regulator issued updated guidance requiring firms to extend payment deferrals up to six months and provide tailored support to mortgage borrowers facing financial difficulties due to the coronavirus pandemic. The rules prohibit home repossessions without consumer agreement until after 31 January 2021 and apply to customers affected by the crisis through 31 March 2021. This enhanced support framework came into effect on 20 November 2020 to protect consumers during exceptional circumstances while allowing for future updates based on ongoing uncertainties.
We have updated our guidance on payment deferrals and tailored support to provide enhanced support to mortgage borrowers who face payment difficulties as a result of coronavirus.
Read the feedback statement (FS20/17)
On 2 November, we published proposals to enhance the support to mortgage borrowers who face payment difficulties due to coronavirus (Covid-19).
This feedback statement summarises the feedback we received on our proposed measures and our response. The Payment Deferral Guidance and Tailored Support Guidance set out our expectations on firms to ensure that:
they continue to provide payment deferrals to consumers who have not yet had a payment deferral, and those who have had less than 6 months of payment deferrals who will be able to top up as long as total deferrals do not exceed 6 months
they continue to provide tailored support to customers facing financial difficulty as a result of coronavirus who have benefitted from payment deferrals under the Payment Deferral guidance and remain in financial difficulty, as well as those who are affected by coronavirus after 31 March 2021
no one should have their home repossessed without their agreement until after 31 January 2021
We wanted to act quickly to protect consumers in these difficult times and provide clarity for firms and so did not formally consult on the proposals or produce a cost benefit analysis. To do this would have caused a delay that would be prejudicial to the interests of consumers. However, we invited comments on our proposals and received 28 responses from consumer organisations, firms, trade bodies and individuals.
Action and next steps
The guidance comes into effect on 20 November 2020 but we encourage firms that are able to start providing this enhanced support sooner to do so.
The guidance applies in the exceptional circumstances arising out of the coronavirus pandemic and its impact on the financial situation of mortgage customers.
Given ongoing uncertainties arising from the impact of coronavirus, we will keep our position under regular review and will update or amend our guidance, or provide new guidance, if it is required.
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