MCOB 7A Additional MCD disclosure: start of contract and after sale

This chapter applies to a firm that is an MCD mortgage lender or an MCD mortgage administrator.

A firm must provide the information required by this chapter in a durable medium.

When giving notice to a consumer of any changes that the consumer is required to make resulting from interest-rate changes for an MCD regulated mortgage contract, a firm must:

1. (1)

   give notice of the amount of the payments to be made after the new interest-rate change takes effect; and

2. (2)

   where the number or frequency of the payments will change, give particulars of these changes.

1. (1)

   If a consumer notifies a firm that they wish to discharge their obligations under an MCD regulated mortgage contract prior to its expiry, the firm must provide the consumer, without delay, with the information necessary to allow them to consider that option.

2. (2)

   The information under (1) must:

   1. (a)

      quantify the implications for the consumer of discharging their obligations prior to the expiry of the MCD regulated mortgage contract; and

   2. (b)

      clearly set out any assumptions that have been used.

3. (3)

   The assumptions under (2)(b) must be reasonable and justifiable.

1. (1)

   A firm must warn any consumer with a foreign currency loan, on a regular basis, where the value of either:

   1. (a)

      the total amount payable by the consumer which remains outstanding; or

   2. (b)

      the regular instalments;

   varies by more than 20% from what it would be if the exchange rate between the currency of the MCD regulated mortgage contract and the currency of the EEA State, applicable at the time of the conclusion of the MCD regulated mortgage contract, were applied.

2. (2)

   The warning in (1) must inform the consumer of a rise in the total amount payable by the consumer, setting out the right to convert to an alternative currency, where applicable, and the conditions for doing so. It must also explain any other applicable mechanisms for limiting the exchange-rate risk to which the consumer is exposed.

A firm must disclose to the consumer its arrangements for complying with the obligations in MCOB 7A.4.1 R in the MCD regulated mortgage contract.

In relation to an MCD regulated mortgage contract, where there is an auction on the capital markets which will, or might reasonably be expected to, result in an interest-rate change, the firm must give the consumer, in good time before the auction, notice in a durable medium of:

1. (1)

   the upcoming procedure for the auction; and

2. (2)

   an indication of how the interest rates could be affected.