FCA has finalised its additional guidance to firms in the mortgage markets, setting out how they should provide tailored support to borrowers who have had payment deferrals but continue to struggle, and to those whose financial situation may be affected by COVID-19 after 31 October.
FCA’s June guidance continued to apply until 31 October, and this additional guidance takes effect from 16 September. The new guidance:
- stresses the need to customise solutions for individual borrowers, while also ensuring firms generally signpost borrowers to sources of support;
- confirms that where borrowers need further support this can be reflected on credit files, as will support newly given after 31 October;
- reminds firms that customers may take a first or second three-month deferral under existing guidance until 31 October
Firms also need to continue to make sure their staff are properly trained to give customers the support they need. FCA notes that firms may be able to use some automation options, so long as there are appropriate systems and controls to ensure compliance with the guidance and MCOB 13. FCA has published a feedback statement on its consultation alongside the finalised guidance. Among the changes it has made following responses are:
- to clarify the firms can offer broadly appropriate forms of support to certain types of customer coming to the end of their deferral period without having to show it is appropriate for the customer’s individual circumstances, so long as the firm reviews the situation within 60 days;
- to allow firms to use this approach for eligible second charge customers, and offer them capitalisation on the same basis as to first charge;
- to clarify its expectations of firms responding to customer vulnerabilities; and
- to clarify its expectations of firms considering repossession.