The PRA statement explains that at the end of a payment deferral granted as a result of coronavirus, if the mortgage borrower is not able to resume payments in full immediately with all deferred sums either paid in full or capitalised, tailored forbearance arrangements provided in accordance with the Proposed Guidance should be considered.
The PRA states that tailored forbearance arrangements are likely to be a good indicator of significant increase in credit risk (SICR), credit impairments or defaults as forbearance was prior to the coronavirus crisis.
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Bill McCaffrey is a financial services partner with CMS
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