The guidelines were created in response to the impact of the COVID-19 pandemic on households and the need for additional protections to ensure financial stability.
The guidelines provide advice to borrowers who may have difficulty making their mortgage payments, or who are considering switching lenders. FCAC encourages lenders to work with their customers to develop a suitable repayment plan, or a loan modification if needed to ensure repayment. It also stresses the importance of treating borrowers fairly and the need for clear communication between the two parties.
FCAC stresses the need for lenders to act responsibly when dealing with at-risk borrowers. It recommends that lenders consider offering alternative payment arrangements, such as deferring payments, reducing interest rates, or providing more time to pay.
In addition to the guidelines, FCAC has produced an online toolkit which includes an interactive tutorial, sample letters, and other useful materials to help lenders understand their rights and responsibilities when dealing with borrowers in difficulty.
Overall, the new guidelines and tools from FCAC aim to ensure that borrowers who are struggling financially are provided with the necessary support and resources they need. FCAC hopes that these new measures can help Canadians stay on top of their finances and manage their mortgage debt.
The Financial Consumer Agency of Canada (FCAC) has announced new guidelines aimed at supporting mortgage borrowers who are facing financial difficulties due to the Covid-19 pandemic. The guidelines emphasize the importance of responsible lending practices and encourage lenders to work with borrowers to develop a suitable repayment plan or a loan modification if needed. In addition, FCAC has produced an online toolkit which contains an interactive tutorial, sample letters, and other useful materials to help lenders understand their rights and responsibilities when dealing with borrowers in difficulty.
The new guidelines come at an important time, as many Canadians are experiencing financial hardship due to job losses, salary reductions, and other factors caused by the pandemic. The FCAC guidelines and online toolkit provide lenders with the necessary information and resources they need to properly handle these difficult situations. By doing so, the agency hopes to protect borrowers from becoming overwhelmed by debt and ensure that they can manage their mortgage payments.
The regulations and support offered by FCAC not only provide borrowers with much needed assistance, but also provide lenders with the confidence they need to carry out their duties responsibly. With the necessary guidance in place, lenders can identify any potential risks associated with a given loan, and take the necessary steps to ensure that borrowers receive a fair and reasonable repayment plan.
Finally, the new guidelines are a step in the right direction in terms of improving consumer protection. By providing both lenders and borrowers with the necessary tools and resources, it is hoped that the situation for those facing financial difficulties can be greatly improved.
This article was contributed on Dec 12, 2023