Finance

UK extends mortgage holiday by three months

The U.K. Treasury instructed banks Friday to extend mortgage holidays for another three months for people still struggling with the impact of the coronavirus.

Banks should contact existing beneficiaries to give them a chance to extend the payment suspensions put in place since March, which are due to begin expiring in June.

For borrowers who can resume payments, “it is in their best interest to do so,” the Treasury said.

Lenders will keep the window of applications open for customers to request deferrals until October 31, under related guidance from the Financial Conduct Authority. The FCA extended its ban on home repossessions until then.

“Anyone who continues to need help gets help,” the regulator said.

Nonpayment of a mortgage under a moratorium is not to be treated as a bad loan, the Bank of England said, reiterating its March guidance on the application of capital, provisioning and accounting rules.

Banks should revise payment schedules according to how much a borrower can afford to pay. For those unable to resume full payments on those terms, banks should distinguish between those temporary cash shortfalls versus people facing longer-term trouble, such as permanent loss of a job.

Lenders would then take a “proportionate approach” to asseRead More – Source