The government’s ban on repossessions ended on 1 November. Instead the FCA listed new guidance for lenders on how to deal with borrowers who faced continued difficulties paying their mortgage because of the pandemic. The problem with the guidance, particularly for brokers trying to advise their clients, is that it is woolly at best.

Under the new measures, the regulator wants and expects lenders to look at each case on an individual basis. With measures varying from extending the mortgage term to reducing repayments or putting part of the mortgage on an interest-only basis, it can be challenging for mortgage brokers to provide their clients with any concrete advice. But what they can do is be there to talk through the options that may be available to them, particularly if the impact of some of those options may affect the client’s credit record.

Keeping in touch

Although many borrowers go direct to their lender if they experience payment difficulties, it is an important time for brokers to be in touch with their clients as a trusted adviser.

Reminding clients of that protection policy they bought is a case in point. Brokers who have been really hot on making sure their clients took out the protection they needed over the past few years should be able to reassure them that, if they were to lose their job and/or fall ill, their policy might well pay out. Depending on the policy, this may cover their mortgage payments as well as a possible lump sum for illness or redundancy –assuming the policies they were sold did not contain exemptions for events such as a pandemic.

If a client is experiencing financial difficulties, the best advice is still to continue to pay their mortgage wherever possible – and to stay in contact with the lender to keep it updated. When facing scenarios such as redundancy, it can be tempting for some people to put their head in the sand and not answer letters or calls from their bank. However, if you have already built up a trust relationship, they may be willing to talk to you, their broker, instead.

Brokers may have no influence over a lender’s course of action but they can still talk things through with their client to make them aware of the options and help them to look at the longer term, such as the potential impact on their ability to obtain credit if they start to default on their mortgage. When a person is in the middle of a trauma such as redundancy, it can be hard to look beyond the here and now. By providing a wider perspective, brokers can help clients to choose the best course of action not only for now but for the longer term. The benefit to the broker is likely to be long-term loyalty even if there is no short-term gain.

So, if you haven’t already done so, go through that CRM system. Systematically get in touch with each of your clients. Book phonecalls with them just to see what is happening in their lives.

You will not only be helping your clients; you will be ensuring the longer-term health of your business. And, when things are back to whatever our new normal looks like, always remember your protection sales, for both new and existing clients.

Not only is this good business practice, it could be essential for your clients. After all, do you really want to be on the end of that call with your client, where they ask you if they are covered by their policy, and you have to explain that they chose not to tick that particular box?

Melanie Spencer is head of MCI Club