From April 1, firms will be able to enforce repossessions after the regulator extended the repossessions ban in January, amid a worsening pandemic and the government’s tighter coronavirus-related restrictions at the time.
In its proposals on repossessions, published today (March 5), the FCA said firms should be “mindful” of the need for fair and appropriate treatment of customers who may be particularly vulnerable, including as a result of the pandemic.
Repossession, it said, "should only take place as a last resort if all other reasonable attempts to resolve the position have failed".
It said: “Firms should consider carefully the potential impacts on customers of possession proceedings and consider whether it is appropriate to commence or pursue repossession proceedings, including taking possession, in a particular case at this time.”
The regulator added that when considering if it would be fair and reasonable to enforce repossession, consideration should be given to any circumstances that may mean a customer, or anyone in their household, would be at “greater risk of harm” from coronavirus if they were required to vacate the property.
For example, firms should not require customers to vacate their home when they, or a member of their household, are required to self-isolate.
But the FCA also said firms should discuss the potential consequences of suspending repossession with customers, such as the effect on their remaining equity if the amount they owe is increasing.
The FCA is seeking comment on the proposals by 10am on March 10, as it said it wanted to “act quickly to continue to protect consumers in these difficult times”.
Payment deferrals
The FCA also reminded borrowers of the deadline for applications for new payment deferrals on March, 31.
Only consumers still in a payment deferral on that date will be able to extend their deferral, which will then end on July 31 at the latest.
Those newly impacted by coronavirus, or who find themselves impacted again, can get tailored support from their lender under the Tailored Support Guidance, which reflects their individual needs and circumstances.
This could include short-term support such as a payment deferral, although this would be subject to normal credit reporting.
The FCA warned borrowers to think carefully about whether they need to take a payment deferral.
It said: "The PDG enabled firms to deal with unprecedented demand for short-term support resulting from the pandemic.
"However, demand for payment deferrals has reduced and firms now have the capacity to offer both shorter and longer-term support. That support should provide better outcomes for consumers as it includes a wider range of options and is tailored to their individual needs."
It added: "We understand that many consumers will continue to face difficulties as a result of the uncertainty caused by the crisis.
"We will continue to monitor and supervise how firms are implementing our guidance, to ensure that they continue to provide consumers with support that reflects the challenges that they face."
The FCA will publish the findings of its initial supervisory work in this area by the end of March.
chloe.cheung@ft.com
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