The FCA has revealed that buy-to-let mortgage providers may soon be covered by the same Covid regulatory guidance that consumer mortgage providers are required to follow by the financial regulator.
This means that landlords who have taken a mortgage holiday during Covid would be covered by the same ‘duty of care’ rules that home owners in the same position are currently afforded.
LandlordZONE contacted the FCA after it published new draft guidance for mortgage lenders, which aims to ensure that home owners get the support they need in these extraordinary times, to ask if landlords would get the same protection as other mortgage borrowers.
“The framework we are proposing for the tailored support that we want firms to provide after the expiry of the June Guidance is that set out in our Mortgage: Conduct of Business rules (especially MCOB 13),” the FCA says.
It says this guidance is designed to ensure that mortgage firms provide support to borrowers who have taken a mortgage holiday during the Coronavirus pandemic but who continue to face financial difficulties, as well as those who may be considering a mortgage holiday in the future.
This guidance was published on 20th March and updated twice during June, enabling borrowers to take-up a first and subsequent ‘payment deferral’. This expires on 31st October and the FCA is now consulting on its future approach as ‘the wider situation develops’.
But the guidance has not included most buy-to-let mortgages, which are unregulated, unlike those for home purchases,
“However, we do have regard to the unregulated activities of the firms we regulate – and the draft guidance (at para 2.6) explains that we might look at the guidance when assessing if a firm was meeting our Threshold Conditions,” the FCA has told LandlordZONE.