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MCOB 12.1 Application

Who?

MCOB 12.1.1R

This chapter applies to a firm in a category listed in column (1) of the table in MCOB 12.1.2 R in accordance with column (2) of that table.

What?

MCOB 12.1.3R

This chapter applies where a firm:

  1. (1)

    enters into, or makes a further advance on, a home finance transaction1; or

    1
  2. (2)

    administers a home finance transaction;1 or

    1
  3. (3)

    arranges or advises on a home finance transaction1 or a variation to the terms of a home finance transaction1.

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MCOB 12.1.4R

The payment shortfall4 charges and excessive charges requirements in this chapter1 will continue to apply to a firm after a regulated mortgage contract has come to an end following the sale of a repossessed property. The excessive charges requirements will continue to apply to a firm after a home reversion plan has ended.1 References in this chapter to 'customer' will include references to a former customer as appropriate.

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MCOB 12.1.5G

The FCA will expect a firm to ensure that charges made to a customer arising from the sale of a repossessed property and charges arising in relation to a sale shortfall1 are not excessive and are subject to the same considerations as apply with respect to payment shortfall4 charges under this chapter.

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Charges under regulated mortgage contracts which had previously been regulated credit agreements

MCOB 12.1.5AR

5The rules in MCOB 12.4 (Payment shortfall charges: regulated mortgage contracts) and MCOB 12.5 (Excessive charges: regulated mortgage contracts, home reversion plans and regulated sale and rent back agreements) apply to:6

  1. (1)

    second charge regulated mortgage contracts entered into before 21 March 2016, in relation to charges imposed on a customer for events occurring on or after 21 March 2016; and6

  2. (2)

    regulated mortgage contracts which are legacy CCA mortgage contracts secured by a first charge legal mortgage, in relation to charges imposed on a customer for events occurring on or after the earliest of:6

    1. (a)

      the date on which the lender first acts in compliance or purported compliance with rules in the FCA Handbook which apply to regulated mortgage contracts in respect of the contract; 6

    2. (b)

      the date from which the lender notifies the borrower in writing that it will act in compliance with such rules in respect of the contract; and 6

    3. (c)

      21 March 2017.6

MCOB 12.1.6R

1This chapter does not apply to a firm carrying on reversion activities or regulated sale and rent back activities3 in respect of a customer acting in his capacity as an unauthorised reversion provider or as an unauthorised SRB agreement provider.3