On 13 January 2021, the Financial Conduct Authority (FCA) published new draft Tailored Support Guidance for mortgage lenders. The Guidance proposes that no enforcement action (that is, enforcing or seeking a warrant of possession) be taken by lenders until 1 April 2021, absent exceptional circumstances, such as the customer requesting it.
The proposed changes are to paragraphs 1.2, 7.2 and 7.6 of the existing Tailored Support Guidance document, which came into force on 16 September 2020 and was updated with effect from 20 November 2020. The Tailored Support Guidance dovetails with the separate ‘Mortgages and coronavirus: Payment Deferral Guidance’, which itself was first issued in March 2020 and was updated in June and November 2020.
Since the outbreak of the Coronavirus pandemic, the FCA has issued Guidance and Updated Guidance to mortgage lenders in piecemeal fashion, as the spread of the virus has unfolded. The current Guidance (issued in November 2020) obliges mortgage lenders to refrain from enforcing warrants of possession or restitution before 31 January 2021, unless exceptional circumstances obtain, such as the customer requesting that the enforcement action proceed.
The proposed amendments are to extend the date before which lenders should not seek or enforce warrants until 1 April 2021, namely an additional 2 months compared with the existing Guidance.
Lenders may continue to seek possession orders from the courts, either by commencing, re-commencing, or continuing possession proceedings, up until and including the stage of obtaining a possession order, so long as they act in accordance with the Guidance, MCOB 13 and applicable pre-action protocols.
In keeping with the recent tight timetables under which the regulator has published drafts and sought comments thereon, the consultation period is only open for approximately 120 hours. The FCA says, “We want to act quickly to continue to protect consumers in these difficult times. We consider that the delay involved in publishing a formal consultation accompanied by a cost benefit analysis would be prejudicial to consumers’ interests. We are therefore not doing so.” It also points out that a cost benefit analysis is not a statutory requirement for guidance.
The FCA has invited comments from stakeholders up until 10:00am on Monday 18 January 2021. Comments are to be via email to FCAconsumercredit@fca.org.uk