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
  • Communication
  • 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
  • loads

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.