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Repossessions to resume from April

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Written by: Emma Lunn
05/03/2021
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In an update to its draft guidance for the support of mortgage customers, the regulator said repossessions should be a last resort and borrowers were still entitled to tailored forbearance if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 – the mortgage rules – 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. 

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