Mortgages and Home Finance: Conduct of Business …

1 Mortgages and HomeFinance: Conduct ofBusiness SourcebookMCOB ContentsMortgages and home finance : Conduct of BusinessSourcebookMCOB 1 Application and and application: who? what? application: where? to appointed regulated mortgage contracts and regulated creditagreements1 Annex 1[deleted]1 Annex 2[deleted]1 Annex 3[deleted]1 Annex 4[deleted]MCOB 2 Conduct of Business standards: mortgage contracts: guidance on the meaning of paymentshortfall : regulated mortgage contracts, home reversion plans andregulated sale and rent back pressure sales: regulated mortgage contracts, home reversion plansand regulated sale and rent back on customer's best of customer s interests: regulated mortgage contracts, homepurchase plans, home reversion plans and regulated sale and rent to electronic media and distance on marketing or providing an optional product for which afee is payable2 Annex 1 GForm of joint instruction letterMCOB 2 AMortgage Credit.

2 MCD regulated mortgage currency rate free of chargen Release 19l May iMCOB ContentsMCOB 3 AFinancial promotions and communications with and fair, clear and not misleading general requirements forfinancial creditfinancial purchase planfinancial reversion planfinancial and rent backfinancial and controlsMCOB 3 BMCD general of general informationMCOB 4 Advising and selling disclosure disclosure for distance mortgage mediation contracts,distance home purchase mediation contracts and distance regulated saleand rent back mediation contracts with retail of distance mortgage mediation contracts, distance homepurchase mediation contracts and distance regulated sale and rent backmediation of fees or charges into loans and loans to high net worth mortgage customers:tailored purchase plans: sales and rent back: advising and selling standards4 Annex 3 Additional information requirements in respect of distance mortgagemediation contracts, distance home purchase mediation contracts anddistance regulated sale and rent back mediation contracts withconsumersMCOB 4 AAdditional MCD advising and selling disclosure by MCD mortgage credit of recommendationMCOB 5 Pre-application for a homefinance transactionn Release 19l May iiMCOB on regulated mortgage contracts.

3 Of of loans and loans to high net worth mortgage customers: purchase disclosure for regulated sale and rent back agreements5 Annex 1 The mortgage illustration: table of contents, prescribed text andprescribed section headings and 5 AMCD Pre-application and for an MCD regulated mortgage on MCD regulated mortgage contracts: of a European Standardised Information Sheet (ESIS) of European Standardised Information Sheets (ESISs) information5A Annex 1 European Standardised Information Sheet (ESIS)5A Annex 2 Instructions to complete the ESISMCOB 6 Disclosure at the offer : content of the offer : information to be provided in the offer document : offer documents in place of loans and loans to high net worth mortgage customers: purchase sale and rent back agreements6 Annex 1 Distance home purchase plans: information to be provided to Annex 2- Written Pre-offer Document of a regulated sale and rent Annex 3- Cooling-Off Document of a regulated sale and rent back 6 AMCD disclosure at the offer and Mortgages : binding offer, content of the offer document andreflection Mortgages : information to be provided in the offer document distance contracts with retail customersn Release 19l May iiiMCOB ContentsMCOB 7 Disclosure at start of contract and after : disclosure at the start of the : : event-driven loans and loans to high net worth mortgage customers.

4 Purchase disclosure for regulated sale and rent back agreements7 Annex 1An example of the Total Borrowing 7 AAdditional MCD disclosure: start of contract and after and of interest-rate repayment currency loans and significant exchange-rate of changes resulting from auctions on the capital marketMCOB 7 BMCD: further to be provided for further advancesMCOB 8 Equity release: advising and selling of rules in MCOB [deleted] disclosure information: unauthorised reversion provider8 Annex 1 Initial disclosure document [deleted]8 Annex 2 Combined initial disclosure document [deleted]MCOB 9 Equity release: product of at the offer stage for equity release at the start of the contract and after sale for equity at the start of the contract: lifetime after sale: lifetime mortgagesn Release 19l May ivMCOB after sale: home reversion plans9 Annex 1 The illustration: table of contents, prescribed text and prescribedsection headings and subheadings9 Annex 2 The illustration: table of contents, prescribed text and prescribedsection headings and sub-headingsMCOB 10 Annual Percentage and assumptions for calculating the charge for creditMCOB 10 AMCD Annual Percentage Rate of of the : mathematical formula and.

5 Additional assumptionsMCOB 11 Responsible lending, and responsiblefinancing of home lending unable to change regulated mortgage contract, homepurchase plan or with the same or a different lender with no additionalborrowingMCOB 11 AAdditional MCD responsible lending mortgage credit intermediary: submission of information to MCDmortgage on cancellation or variation of MCD regulated mortgagecontract on grounds of information for, and assessment of, affordability from theconsumer and rejecting an applicationMCOB repayment charges: regulated mortgage shortfall charges: regulated mortgage charges: regulated mortgage contracts, home reversion plansand regulated sale and rent back agreementsn Release 19l May vMCOB loans and loans to high net worth mortgage customers: purchase plansMCOB 13 Arrears, payment shortfalls and repossessions: regulatedmortgage contracts and home purchase fairly with customers with a payment shortfall: policy : provision of information to the customer of a regulatedmortgage sharing with other charge with a customer in arrears or with a sale shortfall on aregulated mortgage loans and loans to high net worth mortgage customers.

6 Purchase plansMCOB 14 MCD article 3(1)(b) credit provisions which apply in respect of MCD article 3(1)(b) creditagreementsMCOB 15P2P homefinance provisions which apply in respect of homefinancetransactions entered into via a P2P on the application of MCOB where agreements are facilitatedby a P2P provisions about the application of MCOB where agreements arefacilitated by a P2P provisions disapplied from P2P platform operatorsTransitional provisions and SchedulesTP 1 MCD Transitional ProvisionsTP 4 Other Transitional ProvisionsTP 5 Transitional Provisions: Regulated mortgage contractsSch 1 Record keeping requirementsSch 2 Notification RequirementsSch 3 Fees and other required paymentsSch 4 Powers exercisedSch 5 Rights of action for damagesSch 6 Rules that can be waivedn Release 19l May viMCOB Contentsn Release 19l May viiMortgages and home finance : Conduct of Business SourcebookChapter 1 Application and purposen Release 19l May 1/1 MCOB 1 : Application andSection : Application and Release 19l May 1 and applies as described in this purpose of this chapter is to set out to whom, for what activities, andwithin what territorial limits the rules, evidential provisions and guidance inMCOB 1 : Application andSection : General application: who?

7 Purposewhat? Release 19l May 1 application: who? what?(1) This sourcebook applies to every firm that:(a) carries on a home finance activity (subject to the Business loanand loans to high net worth mortgage customers applicationprovisions); or(b) communicates or approves a financial promotion of qualifyingcredit, of a home purchase plan,of a home reversion planor of aregulated sale and rent back agreement.(2) Where a firm has outsourced activities to a third party processor, anyrule in MCOB which requires the third party processor, when acting assuch, to disclose its identity to a customer must be read as requiringdisclosure of the identity of the firm (or appointed representative, asappropriate) which is taking responsibility for the acts and omissionsof the third party processor when carrying on the which outsource regulated activities are reminded of the guidance onoutsourcing in n SYSC G and n SYSC types and the home finance (1)

8 This sourcebook applies to activities carried out in respect ofregulated mortgage contracts, equity release transactions, homepurchase plans, and regulated sale and rent back , these products are referred to as home finance transactions.(2) Lifetime Mortgages and home reversion plans are together referredto as equity release transactions.(3) The application of most of this sourcebook is expressed by referenceto four types of firm: lenders/providers, administrators, arrangers, andadvisers. Arrangers and advisers are together referred to asintermediaries. This includes those firms that provide Business loans tocustomers under a regulated mortgage contracts (see n MCOB Rto n MCOB G). A single firm may fall into more than one of thesetypes.

9 PERG 4 contains detailed guidance on regulated mortgageactivities and PERG 14 contains detailed guidance on home purchaseactivities,reversion activitiesand regulated sale and rent 1 : Application andSection : General application: who?purposewhat? Release 19l May 1/4 Business loans and loans to high net worth mortgagecustomers: application of relation to a regulated mortgage contract for a Business purpose(1) MCOB applies if the customer is not a large Business customer; and(2) if MCOB applies, a firm must either:(a) comply with MCOB in full (disregarding the tailored provisionsfor regulated mortgage contracts for a Business purpose in theremainder of MCOB); or(b) comply with MCOB in full, but taking account of all thosetailored provisions, including n MCOB relation to a regulated mortgage contract with a high net worthmortgage customer, a firm must either:(1) comply with MCOB in full (disregarding the tailored provisions forregulated mortgage contracts with high net worth mortgagecustomers in the remainder of MCOB).

10 Or(2) subject to n MCOB R, comply with MCOB in full, but takingaccount of all those tailored provisions, including n MCOB any provision of MCOB is expressed to apply in respect of a high networth mortgage customer, it applies in respect of joint borrowers (orpotential borrowers) if one of them satisfies that definition in his own relation to an MCD regulated mortgage contract with a high net worthmortgage customer, to comply in full with MCOB, a firm does not need tocomply with those provisions in MCOB that are expressed not to apply toMCD regulated mortgage tailored provisions are those in the sections ' Business loans and loans tohigh net worth mortgage customers: tailored provisions set out in eachrelevant other provisions of MCOB apply in all cases in respect of high networth mortgage customers or of transactions which are solely for a businesspurpose.