A firm should ensure that its written policy and procedures include:
using reasonable efforts to reach an agreement with a customer over the method of repaying any payment shortfall or mortgage shortfall debt, in the case of the former having regard to the desirability of agreeing with the customer an alternative to taking possession of the property;
adopting a reasonable approach to the time over which the payment shortfall or mortgage shortfall debt should be repaid, having particular regard to the need to establish, where feasible, a payment plan which is practical in terms of the circumstances of the customer;
granting, unless it has good reason not to do so, a customer's request for a change to:
the date on which the payment is due (providing it is within the same payment period); or
the method by which payment is made;
and giving the customer a written explanation of its reasons if it refuses the request;
giving consideration, where no reasonable payment arrangement can be made, to the customer being allowed to remain in possession to effect a sale; and
repossessing the property only where all other reasonable attempts to resolve the position have failed.
The requirement in MCOB 13.3.1 R(2) for a written policy and procedures is intended to ensure that a firm has addressed the need for internal systems to deal fairly with any customer in financial difficulties. MCOB 13.3.1 R(2) does not oblige a firm to provide customers with a copy of the written policy and procedures. Nor, however, does it prevent a firm from providing customers with either these documents or a more customer-orientated version.
should be given a reasonable period of time to consider any proposals for payment that are put to them; in addition, and depending on the individual circumstances, a firm may wish to do one or more of the following with the agreement of the customer:
extend the term of the regulated mortgage contract; or
change the type of the regulated mortgage contract; or
treat the payment shortfall as if it was part of the original amount borrowed;
should be given adequate information to understand the implications of any proposed arrangement; one approach may be to provide information on the new terms in line with the requirements for annual statements (see MCOB 7.5.3 R).
A firm must make and retain an adequate record of its dealings with a customer whose account is in arrears or who has a mortgage shortfall debt, which will enable the firm to show its compliance with MCOB 13.4 (Arrears: provision of information to the customer), MCOB 13.5 (Dealing with a customer in arrears or with a mortgage shortfall debt) and MCOB 13.6 (Repossessions).
The record referred to in MCOB 13.3.9 R should contain, or provide reference to, matters such as:
the basis for issuing tailored information in accordance with MCOB 13.7.1 R;
information relating to any new payment arrangements proposed;
the date of issue of any legal documents;
the arrangements made for sale after the repossession (whether legal or voluntary); and