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Lloyds and NatWest lay out missed mortgage payment plans due to coronavirus

Lloyds Banking Group and NatWest borrowers will not have a black mark against their credit file if they miss a mortgage payment because of the coronavirus.

Customers of Lloyds Banking Group will not be charged fees for missed payments on mortgages and payment holidays will be offered on mortgages with additional support offered to households if it is needed.

Where payment holidays have been agreed, it will not affect the customer’s credit file because the payment was not expected for that month which means the account will not go into arrears.

A spokesperson for Lloyds said: “Being there for our customers when they need us is our priority. We are making some temporary changes over the coming weeks, and will be providing individual support to customers who need extra help.”

Last week, NatWest offered to extend payment holidays to borrowers in financial difficulty because of the virus.

The bank has now confirmed its specialist debt management agents would ask appropriate questions to understand the root cause of the actual or anticipated financial difficulty to establish how it related to the coronavirus when a customer contacted them.

A borrower will not be considered to be in arrears during the period of an agreed mortgage repayment holiday if they were up to date when the repayment holiday was entered into. There will be no impact on their credit file.

If a customer is already in arrears when they approach NatWest for additional help they will continue to be in arrears when the bank looks at what further support it can offer.

Brokers looking for answers

Mortgage adviser Rachel Dixon of RH Dixon said she had been contacted by worried clients who had heard lenders were offering payment holidays but was unsure if this meant they would be classed as falling into arrears if they took a payment holiday.

She wants more lenders to clarify their position on how they will treat payment holidays or missed payments during the coronavirus outbreak.

A spokesperson for the Financial Conduct Authority said: “The FCA is encouraged to see firms acting proactively to protect consumers who may be adversely impacted by the Covid-19 (coronavirus) outbreak.

“We continue to engage with firms to understand their contingency plans to address issues that they and their consumers may face. We will keep our guidance under review as necessary.”

The regulator said its rules give firms the ability to consider their arrangements and their customers’ circumstances.


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