The FSA have confirmed an amendment to their glossary definition of “payment shortfall” in relation to regulated mortgage accounts.
The previous definition was:
“the outstanding amount to be paid measured against the amount of payments which have become due during the term of a regulated mortgage contract or home purchase plan, including any arrears amount due.”
However, in order to clarify their intention that the definition of “payment shortfall” should not include outstanding amounts other than missed monthly payments of capital or interest, the definition has been changed to:
“The total sum of periodic instalments of capital or interest (or both) that has become due under the terms of a regulated mortgage contract but which, in breach of those terms, remains unpaid.”
MCOB 12.4 BR and the accompanying guidance have also been updated to reflect the new definition.