Advice on Mortgage Payment Holidays during Covid19 (coronavirus)

Advice on Mortgage Payment Holidays


With the Government announcing a three week extension to the Covid19 lockdown, more homeowners will be considering taking a mortgage payment holiday. However, we are advising borrowers to think carefully before applying for one.

The situation

In response to the financial insecurity felt by many during the lock-down period, the Government has required that all mortgage lenders offer their customers payment holidays and has pledged that this will not affect an individual’s credit score.

Clearly, this is good news for many people whose incomes have been affected by this pandemic and has relieved much anxiety about how mortgage obligations will be met. However, many mortgage-holders who are not in any particular financial difficulties have seen this as an opportunity to improve their cash liquidity or an opportunity to get ‘free money’ and have applied to their lenders, unaware of the potential consequences.

Concerns over payment holidays

Although credit score providers such as Experian and Equifax have agreed that a borrower’s credit score won’t be negatively affected by taking a mortgage payment holiday, the missing payments will still show on a credit report and there is no way of knowing how banks will view or interpret that information in the medium to long term future.

Every lender uses their own algorithms and underwriters to work out whether or not they want to take the risk of lending to someone. The algorithm and underwriters will look at an applicant’s whole credit report and use certain information to calculate their own credit score, which could be very different to the public credit score available through Experian etc. For instance, although erratic payment of a phone bill may not have a dramatic effect on a credit score, it may affect the lender’s view of the borrower. Similarly, individuals have been known to fall foul of certain lenders’ credit score algorithm simply by having a few recent addresses.

Alternatives

Depending on your individual circumstances, there may be alternative solutions available to you before taking the payment holiday:

Asking your lender to switch you to an interest-only product could substantially reduce your repayments

Some people are looking at taking payment holidays in order to save money for home improvements, when actually a further advance might be more appropriate

Advice

Given the unknowns involved, our general advice is to treat mortgage payment holidays as a last resort and only apply for one if you are genuinely unable to cover your mortgage payments.

Borrowers should consider the alternatives and if you’re still intent on going ahead with a repayment holiday application, rather than applying straight to the bank, please talk to your mortgage broker or IFA, who will be able to give you more objective advice than your bank, which will simply process your application.

If you do successfully apply for a payment holiday (borrowers are not automatically entitled to one and lenders will assess each application individually), you should be aware that your repayments will go up once the holiday is at an end and prepare for this appropriately.

Covid19 Update for accessing the courts during the pandemic

Covid19 Update – 20th April 2020

Updated Guidance
The Lord Chief Justice, Master of the Rolls and President of the Family Division produced a message about conducting remote hearings: Click Here
This was then followed by a message from Mostyn J and HHJ Hess about financial remedy proceedings: Click Here
The FLBA produced their own message clarifying the President’s: Click Here

HMCTS Cloud Video Platform (CVP)

From Monday 20th April HM Court and Tribunal Service will begin rolling out it’s new video conferencing system CVP. This should allow everyone to join remote video hearings without any special software. More information can be found Here

How to join telephone and video hearings during coronavirus (COVID-19) outbreak

The following information has been produced by HMCTS as guidance on the use of Remote Hearings during the coronavirus (covid19) pandemic in England & Wales. The information is reproduced with permission from HMCTS to assist those parties who are taking part in remote hearings using videolink, telephone or internet.

Use this guide if you’ve been asked to join a hearing by telephone or video using BT MeetMe, Skype for Business or Cloud Video Platform (CVP) during the coronavirus outbreak

Published 8 April 2020
Last updated 16 April 2020 — see all updates

From: HM Courts & Tribunals Service

Contents

  1. Deciding how the hearing takes place
  2. Preparing for your video or phone hearing
  3. Video hearing rules
  4. Joining by CVP, Skype or BT Meet Me
  5. After the hearing
  6. Legal information about telephone and video hearings

We’re increasing the use of phone, video and other technology to continue as many hearings as possible remotely.

The court or tribunal will decide which hearings can take place by video or phone. Both phone and video are free to use.

HMCTS will contact you by post or email to:

  • let you know if your hearing will take place by video or phone
  • confirm the time and date of the hearing
  • ask for your preferred phone number or email
  • ask if you need any support to join the hearing

Deciding how the hearing takes place

The judge or magistrate will decide on the method for the hearing. Hearings will only take place by video or phone if they’re satisfied it’s in the interests of justice for everyone involved.

To make the decision, they will consider:

  • the details of the case
  • the type of hearing, and how complex it may be
  • information you’ve given to the court that may affect you taking part in a phone or video hearing

Preparing for your video or phone hearing

Be in a quiet, private space and tell everyone in your location you must not be interrupted. If you need to move away from your screen or phone during the hearing, ask permission.

If you are taking part in a hearing with a legal representative, agree how you will communicate confidentially during the hearing.

If you need to have someone with you who is not a legal representative, you must ask the court’s permission.

If you do not understand something, ask court staff or the judge.

Before your phone hearing you must:

  • be ready at least 15 minutes before the call
  • make sure the device you will use is fully charged, so you do not get cut off during the hearing

Before your video hearing you must:

  • test the equipment beforehand so the technology is not a distraction
  • set your screen at 90 degrees to the keyboard so your face can be seen properly
  • sit with light in front of you so your face is not in the shadow
  • make sure the view behind you is blank or neutral

Video hearing rules

Everyone must follow the same rules as in a courtroom. This means:

  • only drink water
  • no eating
  • no smoking or e-cigarettes
  • follow the court or tribunal’s instructions

It’s a criminal offence to record or publish any court hearing without authorisation.

Support to join the hearing

If you need an interpreter or other support to join the hearing, tell us using the contact details in your hearing notice.

You may want to get legal advice before your hearing. To understand more about legal advice and the options available visit the Legal Choices website. You can check if you are eligible for legal aid or see what other sources of affordable legal help are available using Citizens Advice’s guidance.

If you cannot join the hearing

Please tell us using the contact details on your hearing notice. The court will decide whether the hearing may:

  • go ahead without you
  • be scheduled for a later date

If you do not join the hearing, the case could proceed in your absence.

Joining by CVP, Skype or BT Meet Me

Your hearing notice will state if your hearing will take place by phone or video and whether it will be by CVP, Skype or BT MeetMe.

It will also tell you the time and date of your hearing.

How to join by BT meet me phone call

We’ll call you from an unknown number at the time of the hearing. If you use call barring services, turn them off so we can reach you.

When we call you, you’ll hear a welcome message saying you’re invited to join a conference call.

To join:

  1. press ‘*’ (star) key and number one to join
  2. say your name
  3. press the ‘#’ (hash) key
  4. once you’re in the hearing, stay on mute until you’re asked to speak

At the start of the hearing, a member of staff will introduce themselves and explain how the hearing will work and what you need to do.

How to join by Cloud Video Platform (CVP)

Once we’ve received your preferred contact details you’ll receive an email with a website link and sign in details. Check your spam folder if you have not received it.

To join the video hearing:

  1. download Google Chrome as this is the preferred browser
  2. copy the link into Google Chrome and click ‘enter’
  3. type in your full name, click the camera icon to connect with audio and video, then click ‘connect’
  4. select default microphone and camera options then click ‘start’
  5. enter the PIN given in the email invitation and click ‘connect’
  6. when you join you’ll be in the waiting area until the hearing starts.

At the start of the hearing, a member of staff will introduce themselves and explain how the hearing will work and what you need to do.

How to join by Skype for Business

Once you’ve told us your preferred contact details you’ll receive an email with a web link to join the hearing. Check your spam folder if you have not received it.

To join the video hearing:

  1. download Skype for Business software on the device you’ll use to join the hearing. Check this step by step guide on how to download it
  2. click on the Skype for Business link in your email
  3. join as a guest and when asked, type in your full name
  4. wait in the Skype lobby until the chairperson invites you into the hearing
  5. stay on mute with your video off until you are asked to speak or turn the video on

At the start of the hearing, a member of staff will introduce themselves and explain how the hearing will work and what you need to do.

After the hearing

The judge or the person in charge of the proceedings will:

  • check they have dealt with all the issues raised
  • tell you when you can expect a decision
  • confirm the hearing is finished and tell you when you may leave the call

Recording and transcript

The process for recording video hearings will be the same as for hearings held in a court building. Where hearings are recorded, you can apply for a transcript.

Tell us about your experience

We’re doing everything we can to keep hearings running during this time. This includes increasing the number of video and phone hearings. Please help us improve our services by telling us about your experience.

Learn more about how we are managing video and calls hearings during the outbreak .

What is an ‘urgent’ court application during the Covid19 lockdown

Introduction

We are living and practising in unprecedented times. The courts have all but stopped litigants and lawyers from physically attending hearings and the need for social distancing and the self-isolation of judges and staff mean that the court is prioritising “urgent” applications and trials. There is no overarching guidance for all cases in the Courts in London (or other hearing centres) with matters being dealt with on a case-by-case basis. The Chancery Guide, which was drafted in normal times, provides little guidance as to what constitutes “urgency”.

So what does this mean in practice bearing in mind that which was previously “urgent” may not be considered to be such in the current situation? More specifically, on what basis do you assess the importance of your case and if appropriate, seek to persuade the court that your case needs to be dealt with urgently?

Here I consider some general points and then specific areas of law in which further available guidance might help in deciding what is ‘urgent court work’.

Broad Principles

The Collins English definition of “urgent” is something “requiring or compelling speedy action or attention”. That is reflected in the (presently analogous) case law in relation to expedited trials, but with the important caveat that speedy resolution necessarily involves prioritising one case over others.

As Lloyd J said in Dalte Europe Ltd (In Liquidation) v Makki [2004] EWHC 1631 (Ch) at [13]: “Expedition…can only be justified on the basis of real, objectively viewed, urgency of the case, which justifies, first of all, giving preference in the allocation of court time to this case over the other cases in the court’s list…” (emphasis added)

And as Laddie J said in Ifone Ltd v Davies [2005] EWHC 1504 (Ch) at [10]: “In deciding what to do, the court must also bear in mind the needs of other litigants. At the end of the day it is being asked to put one case ahead of all other cases in the list and to give it preferential timetabling treatment” (emphasis added).

Neither the desire for commercial certainty (Eli Lilly & Company v Human Genome Sciences Inc [2012] EWHC 2857 (Pat) at [52]) nor the risk that delay will prejudice enforcement in a general sense (Daltel at [17]) will justify the prioritising of a case. So the core point is that a litigant has to justify the special feature(s) about their case that justifies it being heard before others, rather than being adjourned. Self-induced urgency caused by delay on the part of a litigant or their representative may well not be good enough.

General Categories

On 3rd April 2020, national “Civil Listing Priorities” guidance was issued for County Court work (https://www.judiciary.uk/coronavirus-covid-19-advice-and-guidance/#civilguidance) which included a list of “Work which must be done”. Categories therein potentially translatable to Court work are:

(1) committals

(2) Freezing Orders

(3) injunctions and return days for ex parte injunctions

(4) enforcement work that does not involve bailiffs, such as third-party debt orders

(5) any applications in cases listed for trial in the next three months

(6) any applications where there is a substantial hearing listed in the next month

(7) trials where parties agree that it is urgent; and

(8) appeals in all these cases.

Injunction applications will still need to be time sensitive. A useful test may to be ask whether, by analogy with ex parte applications, delay until normal court service resumes would “defeat the purpose of the injunction” (National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] 1 WLR 1405).

If you do have court work which you consider to be urgent and you need a solicitor to help you with that, give us a call on 020 8401 7352 or by email to info@solicitorsfirm.com and we will tell you how we are able to assist and what the costs may be. Despite the Covid19 lockdown, our office continues to work normally, albeit remotely to ensure the safety of all staff, clients and to preserve the integrity of the NHS.

What does ‘furloughed worker’ mean? How do employers access the Job Retention Scheme during the Coronavirus shutdown

What does ‘furloughed worker’ mean? How do employers access the Job Retention Scheme during coronavirus

If your employer wants to access the Job Retention Scheme announced by the Chancellor Rishi Sunak last week to help save jobs during the Coronavirus pandemic, this guide will help them do that. If you are an employee you might want to share this guide with your employer to help them, to help you.

Chancellor Rishi Sunak announced a series of emergency measures in the fight against Coronavirus. One of those measure is that for the first time in history, the UK Government will pay up to 80% of employees salaries, capped at a maximum £2,500 per month. All employers are able to apply to HMRC for this help.

What are furloughed workers?

Under the Coronavirus Job Retention Scheme, all employers in the UK will be able to access support to continue paying part of employees’ salaries who would otherwise have been laid off during the ongoing health crisis.

Furloughed workers are those whose employers cannot cover staff costs due to coronavirus, and as such they have been asked to stop working, but have not been made redundant.

These employers are now able to get support to continue paying part of their staff’s wages, to avoid redundancies. If you are an employee worried for your job, tell your employer about this scheme. It could save your job and also help your employer through these tough times.

How does the scheme work?

If your employer intends to access the job retention scheme, they should first discuss with you becoming classified as a furloughed worker. This means that you are being kept on your employer’s payroll, rather than being laid off. However; you would not be attending the workplace or carrying out all your usual duties.

To qualify for this scheme, you should not undertake work for your employer while you are furloughed, according to gov.uk.

By doing so, this allows your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month, per employee. The employer is not under a duty to pay you the remaining balance of 20%, although if they do so, it will not affect your entitlement. That part is up to your employer. During this time you, the employee, would remain employed.

If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.

The scheme will initially run for at least three months, from 1 March 2020, with all UK businesses eligible. The Chancellor has said that this scheme will be extended if necessary.

What should employers do to access the scheme?

To access the Coronavirus Job Retention Scheme, employers will need to take the following steps:

1. Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law.

2. Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). Once this portal is set up we will update this blog post with a link and further information on how to apply.

If an employer’s business needs short term cash flow support, they may be eligible for a Coronavirus Business Interruption Loan.

Are employees still covered by the Employment Laws when furloughed?

The answer is ‘yes’. As long as an employee complies with the rules they remain protected by the employment laws. However; this does not mean that employees can do anything that breaches their employment contract whilst they are furloughed. So for example, an employee cannot take a second job whilst furloughed and they cannot set up a new business of their own either.

The scheme is designed to help employees survive through the economic hardships of the Coronavirus pandemic.

If you need further information or advice, contact us at info@solicitorsfirm.com