On 17 November 2020, the FCA updated its guidance to firms setting out enhanced support that should be available to mortgage borrowers experiencing payment difficulties as a result of the COVID-19 pandemic. The updated guidance will be fully in force from 20 November 2020 but the FCA encourages firms that are able to start providing this enhanced support sooner to do so.

The FCA has published Finalised guidance: Mortgages and Coronavirus: Payment Deferral Guidance. This guidance is an updated version of the FCA’s guidance Mortgages and Coronavirus: Updated Guidance for Firms. This guidance applies in the exceptional circumstances arising out of the COVID-19 pandemic and its impact on the financial situation of customers of home finance providers. It is not intended to have any relevance in circumstances other than those related to the pandemic. The guidance updates the FCA’s expectations of firms to extend the availability of payment deferrals until 31 July 2021. The FCA expects firms to allow customers impacted by the COVID-19 pandemic to defer up to 6 monthly payments in total but firms should not provide deferrals under the guidance for payments extending beyond 31 July 2021. Firms should not give payment deferrals under the guidance to customers after 31 March 2021 unless they are already benefitting from one. This means both those customers seeking a first payment deferral, and those who have previously accessed payment deferrals that totalled less than 6 months under previous versions of the guidance, can seek a new payment deferral up to 31 March 2021. However, the FCA expects firms to allow customers to extend ongoing payment deferrals under the guidance after 31 March 2021, to cover payments up to and including July 2021, provided these deferrals cover consecutive payments. Subject to the overall maximum of 6 months, the FCA expects firms to offer payment deferrals to customers flexibly when they request them, in tranches up to three monthly payments in a single payment deferral period. This means that customers can choose whether or not to take them consecutively until 31 March 2021. This also means that customers who are newly impacted and applying for a first payment deferral need to apply in good time before their February 2021 payment is due if they want to benefit from the maximum 6 months deferral. Firms should not report a worsening status on the customer’s credit file during any payment deferral period agreed under the guidance.

The FCA has also published Finalised guidance: Mortgages and Coronavirus: Tailored Support Guidance. This guidance is an updated version of the FCA’s guidance Mortgages and Coronavirus: Additional Guidance for Firms and applies to firms dealing with customers facing payment difficulties due to circumstances related to the COVID-19 pandemic who are not receiving payment deferrals under the above guidance on payment deferrals, including where they are not or are no longer eligible for payment deferral. The guidance is designed to enable firms to continue to deliver short and long-term support to customers affected by the evolving COVID-19 pandemic and the Government’s response to it. It is intended to support firms to treat consumers affected by the pandemic fairly and to help consumers to bridge the pandemic to get back to a more stable financial position. The guidance also notes that firms should not absent exceptional circumstances (such as a customer requesting that the proceedings continue) enforce repossession and should not seek, or enforce, a warrant for possession or a warrant of restitution before 31 January 2021. But firms may commence or re-commence and continue repossession proceedings, up to and including obtaining a possession order, as long as they act in accordance with this guidance, MCOB 13, and applicable pre-action protocols.