Firms in the financial services sector should not enforce mortgage repossessions, except in exceptional circumstances, before 1 April, according to updated draft guidance published by the FCA.
The regulator said it was updating its guidance for firms to ensure that mortgage customers whose homes may be repossessed are treated “fairly and appropriately”.
The FCA indicated this particularly applies where there are risks of harm to customers who are vulnerable as a result of coronavirus, which follows the regulator’s recent clarifications on its guidance for treating vulnerable customers.
An FCA statement said: “From 1 April, firms can enforce repossessions, but only if they act in accordance with our guidance, and regulatory requirements which mean that repossession should only take place as a last resort if all other reasonable attempts to resolve the position have failed.
“Firms will also need to comply with any relevant legislative requirements which may prevent firms from enforcing repossession in certain parts of the UK.
“We recognise that repossessions can be difficult and stressful but delaying repossession can lead to poor customer outcomes as a result of increased balances and equity erosion. This is why we propose to allow firms to repossess homes when it is fair and reasonable to do so.”
The FCA said it is seeking comment on its proposals by 10am on 10 March 2021.
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