UK Finance comments on FCA mortgage proposals

UK Finance has responded to FCA’s consultation on what firms should be doing as the next stage of helping customers in financial difficulties due to Covid-19 with their mortgages.  While, of course, UK Finance’s members are committed to helping borrowers, it takes issue with some of FCA’s proposals, and sets out its comments in a detailed response.  It agrees that where customers can afford to re-start mortgage payments they should do so, but that for some an appropriate outcome may be a further deferral, but says there should be no presumption that firms should offer borrowers who have opted for a deferral a further 3 month deferral.  It says a more tailored approach would be more appropriate.  Its data suggests that 60-70% of customers will be able to resume payments, and it may be in their better interests to do so, rather than self-selecting to defer for longer.

UK Finance also notes the guidance suggests different treatment for customers who were previously up to date and those who were in shortfall before 20 March. It thinks this may be confusing, and that all customers in payment shortfall should be offered the same treatment. Additionally it notes a key difference between the current and proposed guidance on customers who want a payment deferral for the first time, but thinks there should be no change.

Among its other comments are a general support for the extension to 31 October.

Emma Radmore