Mortgage Payment Holidays extended – comment

Following the news this morning that the government has extended the mortgage payment holiday scheme by a further three months, Richard Pike, Phoebus Software sales and marketing director, says “The payment holiday programme has been hugely successful in providing some respite to borrowers that are currently experiencing financial uncertainty.

“The extension will be welcomed by borrowers, but the industry will need to manage another wave of borrower communication at a time when many lenders will have been working on recalculating borrower accounts. Whilst also communicating new repayments from the initial 3-month holiday period.

“A reduction in receivables for any lender is always an issue, but en-mass for a sustained period, could be a challenge for some, particularly those with securitised assets. Whatever the Government’s intentions, it could be that lenders will take a more detailed look at some borrowers applying for this new initiative. They will need to ensure that only borrowers that genuinely require them are accepted for the scheme, or that other risks such as LTV are considered more closely”.