Where borrowers have taken, or are taking, payment deferrals under the existing guidance and require further support from mortgage lenders these further arrangements can be reflected on credit files in accordance with normal reporting processes.
This also applies to borrowers newly affected by coronavirus who receive support from their mortgage lender after 31 October.
This will help to ensure that mortgage lenders have an accurate picture of consumers’ financial circumstances and reduce the risk of unaffordable lending. Mortgage lenders are required to be clear about the credit file implications of any forms of support offered to borrowers.
The FCA want mortgage lenders to deliver the following outcomes:
- Customers are to receive appropriate forbearance that is in their interests after consideration of their individual circumstances.
- Mortgage lenders are to support their customers through a period of payment difficulties and uncertainty, including by considering their other debts and essential living costs.
- Mortgage lenders are to recognise vulnerability and respond to the particular needs of vulnerable customers.
- Mortgage lenders must have systems, processes, and adequately trained staff, with any staff incentives aligned with providing their customers with the help they need.
- Customers should receive the support they need in managing their finances, including through self-help and money guidance. Mortgage lenders should signpost or refer them to debt advice if this meets their needs and circumstances.
Where a mortgage lender has dealt with customers at the end of a payment deferral period before this guidance came into force, the mortgage lender should review its approach to customers who are unable to resume payments.
Bob Riach is principal at Riach Financial Advisers