Over 30 MPs have written to FCA Chief Executive Nikhil Rathi calling on the FCA to rethink the 6 month limit the regulator wants to impose on coronavirus mortgage payment deferrals.
The MPs say that the FCA should take account of the impact of the new restrictions on income and jobs by removing the 6 month limit and giving all mortgage holders the right to a 3 month payment deferral.
The limit of 6 months will penalise people in areas of the country and sectors of the economy which have had greater restrictions imposed on them since the initial March lockdown. If people are denied access to a payment deferral then it will be a lottery for them as to what they are offered by their existing lender. They could find their credit file damaged and be stuck paying higher interest rates. The self-employed and business owners could find their prospects of borrowing to invest or sustain their business constrained.
The MPs express grave concerns that the operational pressures parts of the mortgage industry are facing will mean that these customers will struggle to access any tailored support or gain a fair outcome. UK Mortgage Prisoners are telling us that their members are encountering difficulties contacting mortgage administrators and are not being offered support. The FCA’s artificial limit of six months could cause significant hardship and exacerbate existing stress and mental health problems. Many of these individuals have been making partial payments since the initial lockdown and will find the ability to access further flexibility to get them through the new restrictions limited by the FCA’s proposals.
People in our communities are suffering and they need support which is quick and easy to access. The MPs call on the FCA to expand the right to a further 3 month payment deferral to all customers and to not put an artificial limit on the support individual customers can access.
Notes to Editors:
The letter was signed by 31 MPs and Lord Sharkey when it was sent to the FCA this morning. The letter will be updated with any further signatures as they are received by the APPG.