FCA guidance to mortgage lenders during the Covid-19 pandemic

In a time of great worry for many people, there was further positive news on 20 March from the Financial Conduct Authority (FCA) as it issued guidance for mortgage lenders; to apply specifically during the Covid-19 pandemic.

This centres on existing principles of mortgage business, including treating customers fairly and acting in the best of interests of customers. The FCA can take into account this guidance if taking enforcement action against a particular lender.

The FCA has said lenders should:

  • Grant a payment holiday of 3 months where customers may have difficulty paying a mortgage without showing a shortfall or any adverse credit ratings.
  • Not charge additional fees for a holiday (other than additional interest that arises from the holiday).
  • Not seek to repossess any homes or to continue repossession proceedings against customers at this time.

This will no doubt be reassuring for many, and perhaps the self-employed more so than others, given the lack of any measures to date from the Government on income support measures for that category of people.

Further details can be found here.

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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.