The Financial Consumer Agency of Canada (FCAC) has released a guideline outlining expectations for federally regulated financial institutions (FRFIs) in providing tailored support to consumers at risk of mortgage default due to exceptional circumstances. The guideline emphasizes fairness, appropriateness, and accessibility in offering mortgage relief measures. FRFIs are expected to establish effective policies and procedures, including proactive monitoring for financial stress, criteria for offering relief measures, appropriateness assessments, and disclosure of information to consumers. The relief measures may include waiving penalties, fees, and costs, not charging interest on interest, and extending the amortization period. FRFIs should treat consumers at risk fairly, provide temporary relief, and avoid offering less advantageous rates during mortgage renewal. Appropriateness assessments should determine suitable relief measures, with a focus on restoring the original amortization period. FCAC expects clear communication of information to consumers and easy accessibility to relief measures. FRFIs should proactively contact consumers, provide educational resources, and encourage seeking advice from reputable sources. Adequate training should be provided to employees handling mortgage loans and relief measures. FRFIs are also expected to maintain accurate records and report on the implementation of the guideline upon request from FCAC.
The following is a summary of the following press release: https://www.canada.ca/en/financial-consumer-agency/services/industry/commissioner-guidance/mortgage-loans-exceptional-circumstances.html
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