In light of increasing household debt and elevated interest rates, the Financial Consumer Agency of Canada (FCAC) is taking measures to ensure that banks offer appropriate assistance to mortgage holders facing potential default.
Recently, the FCAC released a fresh guideline instructing federally regulated financial institutions (FRFIs) to deliver customized support to individuals who have mortgages on their primary residences and are undergoing "significant" financial challenges.
Based on findings from FCAC research, there is a notable increase in the number of homeowners with mortgages who are facing potential financial difficulties, such as relying more on borrowing for daily expenses or depleting their savings.
The FCAC emphasized that all feasible mortgage relief options should be taken into account, which may include measures like waiving prepayment penalties, internal fees, and costs, refraining from charging interest on interest, and extending the amortization periods.
FRFIs are encouraged to take proactive steps by reaching out to mortgage holders at risk and offering them details about available relief measures, enabling them to make well-informed decisions in a timely manner. Furthermore, FRFIs are expected to provide educational tools and resources at no expense to the consumer, aimed at promoting responsible financial decision-making.
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Anthony Olivera & Ann Rahinel - info@theoliveragroup.com
