*NEW RESEARCH* Mortgage Collections Post-Covid

Live now for clients of the TechSectorViews or FinancialServicesViews research programmes is Mortgage Collections Post-Covid.

Covid-19 has seen millions of people across the country become either furloughed from their jobs or made redundant as industries as varied as hospitality, leisure, travel and manufacturing all reel from the impact of lockdown. One consequence has been unprecedented numbers of homeowners taking “payment holidays” from their mortgages, averaging £755 a month. Given the increasing uncertainty of the economy, this will undoubtably lead to increasing levels of household debt. Lenders will have to subsequently try and collect these defaulted payments, which represent a significant risk to existing mortgage books. For customers, this may lead to interest mounting up and ultimately to extensions to their mortgage terms. Everyone is predicting an uplift in arrears, but there is little understanding the impact or longevity of that uplift.

The customer profile of those requesting payment holidays is very different post-Covid than it would be in more “normal” circumstances. Many mortgage holders who are unable to make their payments, would have had no prior history of arrears or financial hardship.

To discuss the future of collections and arrears in mortgages and loans, in a post-Covid world, I spent some time recently with Katie Pender, Senior Solutions Lead for Mortgages at Target Group, one of the UK’s largest Mortgage Process Outsourcers. 

Here we discuss how lenders can best prepare themselves for a spike in demand as payment holidays come to an end.

Subscribers to TechMarketView's TechSectorViews or FinancialServicesViews can download this report now. If you don’t have a subscription and would like to know more about how to access our services, please email Deb Seth.

Posted by Marc Hardwick at '13:11' - Tagged: mortgageservices   covid-19   collections