Mortgage relief. Image credit: Unsplash/Jakub Żerdzicki
More than 8,000 mortgage relief measures between July 5, 2023, and June 30, 2024 reportedly benefited Canadians with mortgages from federally regulated financial institutions (FRFIs).
Canadians with mortgages from FRFIs were able to avoid more than $4,000,000 in penalties and fees they would have incurred when dealing with late or missed mortgage payments.
A report published Dec 19 by the Financial Consumer Agency of Canada (FCAC) included these results.
Responsible for protecting the rights and interests of consumers of financial products and services, FCAC is a federal agency that works to keep Canada’s financial system safe and strong.
In response to the requirements established by FCAC in its Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances, FRFIs provided consumers with these relief measures, most common being waiving penalties for consumers’ lump-sum payments that were made to avoid negative amortization, and waiving interest charges on interest.
Having recognized in early 2023 that Canadians were facing a challenging economic environment that could lead to severe financial stress among some mortgage holders, FCAC issued this regulatory guideline that sets out expectations for FRFIs to support consumers who are at risk of defaulting on their mortgage for their principal residence.
FRFIs supports consumers by: identifying early signs of severe financial stress and mortgage accounts at risk of default, proactively contacting the holders of mortgage accounts at risk of default to allow them to make timely and informed decisions, and establishing criteria for offering appropriate relief measures, informed by the specific circumstances and financial needs of mortgage holders.
In response to FCAC’s guideline, implemented mortgage relief programs have either enhanced or complemented FRFIs’ pre-existing hardship programs.
FCAC will continue to monitor industry compliance so that Canadians experiencing financial difficulties benefit from the mortgage relief options as set out under the guideline.