UK watchdog says mortgage payment holidays to end Oct. 31
Mandatory mortgage support to end on Oct. 31
Lenders encouraged to offer further forbearance
Over 1.9 million borrowers using scheme
LONDON, Aug 26 (Reuters) - Britain's financial watchdog has called on banks to continue supporting homeowners who are struggling to pay their mortgages since the pandemic, after confirming that it would no longer require lenders to offer repayment holidays after Oct. 31.
The FCA had extended the scheme, which allows mortgage customers to defer payments if they have been impacted by the coronavirus, for a further three months from its original June end-point.
The FCA said lenders should consider a range of alternative support measures for customers in financial difficulty, including further payment deferrals but the regulator stopped short of requiring firms to offer such support.
"We are proposing that firms contact their borrowers in good time before the end of a payment holiday, and work with them to come up with a tailored plan to help get them back on track," said Christopher Woolard, Interim Chief Executive at the FCA.
Britain's finance ministry said more than 1.9 million borrowers have taken advantage of the scheme to delay payments since it was launched in March.
Banks have been told they should not treat borrowers halting payments under the scheme as being automatically in default, but should consider whether their cashflow is likely to recover once various government support schemes end.
The FCA on Wednesday confirmed borrowers coming to the end of a payment holiday who were in need further support would now have that fact reflected on their credit files.
The watchdog's guidance confirms customers who apply for a three month payment deferral before the end of October should be granted one lasting until the end of January.
The FCA said it would keep the situation under review.
(Reporting By Lawrence White and Iain Withers, editing by Sinead Cruise)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.