The Financial Conduct Authority (FCA) considers that a reasonable period for repayment of arrears or a shortfall will depend on the borrower’s circumstances. In some cases, it can mean spreading the payments over the remaining mortgage term.
The lender must not attempt to process more than two direct debit requests in any one calendar month
A mortgage lender must also establish and implement clear, effective and appropriate policies and procedures to ensure the fair treatment of customers whom the lender understands, or reasonably suspects, to be particularly vulnerable.
If a borrower is in arrears, the lender must consider whether one or more of the following actions would be suitable to help resolve the problem
- extend the mortgage term;
- change the mortgage type;
- defer payment of interest due on the mortgage or sums due under a home purchase plan;
- treat the payment shortfall as if it was part of the original amount – know as capitalisation and effectively adding the shortfall to the capital owing;
- make use of any government forbearance schemes to help borrowers with problems.
Please contact your lender as soon as possible if you’re experiencing financial difficulties to get a suitable solution.
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