FCA Handbook - MCOB 5.1 Application

You are viewing MCOB 5.1 Application as of . MCOB 5.1 Application was last updated on 23/03/2018.

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MCOB 5.1 Application

Who?

Subject to MCOB 5.1.2A R, this chapter applies to a firm in a category listed in column (1) of the table in MCOB 5.1.2 R in accordance with column (2) of that table.

This table belongs to MCOB 5.1.1 R

(1) Category of firm	(2) Applicable section
mortgage lender mortgage adviser mortgage arranger	whole chapter except MCOB 5.8
home purchase provider home purchase adviser home purchase arranger	MCOB 5.1.1 R to MCOB 5.1.3 R, MCOB 5.1.6 R to MCOB 5.1.8 G, MCOB 5.2, MCOB 5.3 and MCOB 5.8. MCOB 5.5 and MCOB 5.6 in accordance with MCOB 5.8
reversion provider reversion adviser reversion arranger	see MCOB 9.3 for the application of this chapter
SRB adviser	MCOB 5.1.1 R to MCOB 5.1.3 R, MCOB 5.2 and MCOB 5.9
SRB agreement provider	MCOB 5.1.1 R to MCOB 5.1.3 R, MCOB 5.2,MCOB 5.9.1 R to MCOB 5.9.2 R (including MCOB 5.9.1A G to MCOB 5.9.1F R), MCOB 5.9.6 R and MCOB 5.9.7G
SRB arranger	MCOB 5.1.1 R to MCOB 5.1.3R, MCOB 5.2 and MCOB 5.9

This chapter does not apply to a firm that is an MCD mortgage lender or MCD mortgage credit intermediary.

What?

(1)
This chapter applies if a firm:
1. (a)
  advises a particular customer to enter into, or arranges an execution-only sale in, a home finance transaction; or
2. (b)
  provides information to a customer that is specific to the amount to be provided on a particular home finance transaction, including information provided in response to a request from a customer; or
3. (c)
  provides the means for a customer to make an application to it;
in connection with entering into, or agreeing to enter into, a home finance transaction provided by a home finance provider, other than an equity release transaction or a variation to an existing home finance transaction.
(2)
In relation to further advances and other variations, MCOB 5 is modified by MCOB 7 (Disclosure at start of contract and after sale), regardless of whether they are variations to an existing home finance transaction, or are such that they involve the customer entering into a new home finance transaction.
(3)
In relation to an equity release transaction, MCOB 5 is modified by MCOB 9 (Equity release: product disclosure).

The table in MCOB 5.1.5 G shows how the relevant rules and guidance in MCOB 5.6 apply to certain types of regulated mortgage contracts.

This table belongs to MCOB 5.1.4G

Type of mortgage	Requirements that do not apply	Additional or alternative requirements
Multi-part mortgages	MCOB 5.6.42 R (3) MCOB 5.6.46 R	MCOB 5.6.28 R MCOB 5.6.54 R - MCOB 5.6.57 G
Foreign currency mortgages	N/A	MCOB 5.6.127 R - MCOB 5.6.128 R
Deferred interest rate mortgages	N/A	MCOB 5.6.132 R
Mortgages without a term or regular payment plan	MCOB 5.6.31 R MCOB 5.6.40 R - MCOB 5.6.57 G MCOB 5.6.59 R - MCOB 5.6.65 R	MCOB 5.6.32 R MCOB 5.6.134 R - MCOB 5.6.145 R
Retirement interest- only mortgages	MCOB 5.6.31R MCOB 5.6.52R(1) MCOB 5.6.52R(4) MCOB 5.6.140R – MCOB 5.6.145R	MCOB 5.6.32R MCOB 5.6.59R – MCOB 5.6.65R

In this chapter, references to a home finance transaction include, where the context requires, references to arrangements which are capable of becoming a home finance transaction.

(1)
MCOB 5.1.3 R means that this chapter applies where the customer can apply to enter into a home finance transaction. This includes circumstances where, for example, the means to apply is provided in person, by telephone, through a website or through an application pack sent through the post.
(2)
The effect of this chapter is to require a customer to be provided with key information about a home finance transaction before he submits an application to a home finance provider.

In relation to a regulated mortgage contract, where part of the loan is not a regulated mortgage contract, for example it is a linked unsecured loan, the details of this loan can be shown in Section 12 of the illustration as an additional feature. It should not be added to the regulated mortgage contract loan amount in MCOB 5.6.6 R(2).

A firm that finds any rule in MCOB 5.6 (Content of illustrations) inappropriate for the particular kind of regulated mortgage contract that the mortgage lender provides will need to seek from the FCA a waiver of that rule, unless another rule provides otherwise. SUP 8 contains details of the waiver procedure.