The Mortgage Conduct of Business Rules (MCOB) They were issued by The Financial Services Authority in October 2003. They apply to Regulated Mortgage Contracts.
A ‘Regulated Mortgage Contract’ is a loan on the security of a landlord in the United Kingdom of which at least 40% is used in connection with a dwelling by the borrower. This loan can be an individual or a trustee.
The MCOB rules were designed to improve the information available to consumers and increase consumers’ ability to make informed choices in the mortgage market.
They are a broad scheme of regulations covering: –
- Mortgage selling
- Financial promotion
- Conduct of advising and selling
- Disclosure of information
- Terms of offer
- Duty to treat customers fairly
- Duty to keep records
- Equity release schemes
- Arrears and repossessions
- Calculation of the annual percentage rate
- Calculation of total charge for credit
The MCOB rules apply to every firm that carries a home finance activity. A ‘firm’ may be a mortgage lender, administrator, arranger or adviser. A ‘home finance activity’ may be a regulated mortgage contract, a home purchase plan or a home reversion plan.