Lenders should be able to go ahead with repossessions subject to any government restrictions from 1 April, the Financial Conduct Authority (FCA) has proposed.
In an update to its draft guidance for the support of mortgage customers, the regulator said repossessions should be a last resort and borrowers were still entitled to tailored forbearance if needed.
The FCA said firms should continue to act in accordance with MCOB 13 and only consider any payment deferrals as arrears once a mortgage holiday ends and the next payment is missed.
Lenders should also clearly communicate with customers to reach an agreement to repay any money owed on the mortgage before considering the seizure of a property.
Unless a customer is unreasonably refusing to respond to communication, a property should not be repossessed without a borrower’s consent solely because of a shortfall resulting from a payment holiday.
To ensure a repossession is fair and reasonable, lenders should consider whether the mortgage holder or a member of the household would be put at risk of coronavirus if they were evicted.
If a risk is identified, the repossession should not go ahead until it is deemed safe to do so. Also, tenants should not be asked to vacate a property during self-isolation.
The FCA has asked for feedback on the guidance update by 10am on Wednesday.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS