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MCOB 13.4 Arrears: provision of information to the customer of a regulated mortgage contract1

MCOB 13.4.1R

If a customer falls into arrears on a regulated mortgage contract, a firm must as soon as possible, and in any event within 15 business days of becoming aware of that fact, provide the customer with the following in a durable medium:

  1. (1)

    the current Money Advice Service information sheet “Problems paying your mortgage”;3

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  2. (2)

    a list of the due payments either missed or only paid in part;

  3. (3)

    the total sum of the payment shortfall4;

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  4. (4)

    the charges incurred as a result of the payment shortfall4;

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  5. (5)

    the total outstanding debt, excluding charges that may be added on redemption; and

  6. (6)

    an indication of the nature (and where possible the level) of charges the customer is likely to incur unless the payment shortfall4 is cleared.

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MCOB 13.4.2G
  1. (1)

    The Money Advice Service3 information sheet “Problems3 paying your mortgage” 2is available on the website www.moneyadviceservice.org.uk;3 copies can also be obtained by calling 0300 500 5000.2

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  2. (2)

    [deleted]2

    2
MCOB 13.4.3G
  1. (1)

    A firm may provide the information in MCOB 13.4.1 R (2), (3), (4), (5) and (6) orally, for example by telephone, but must provide the information in a durable medium with a copy of the Money Advice Service3 information sheet “Problems3 paying your mortgage” 23within 15 business days of becoming aware of the customer's account falling into arrears.

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  2. (2)

    Where a firm provides the information in MCOB 13.4.1 R when a payment shortfall4 occurs but before the customer's account falls into arrears, it need not repeat the provision of the information in MCOB 13.4.1 R when the customer's account falls into arrears.

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Customers in arrears within the past 12 months

MCOB 13.4.4R

If a customer's account has previously fallen into arrears within the past 12 months (and at that time the customer received the disclosure required by MCOB 13.4.1 R), the arrears have been cleared and the customer's account falls into arrears on a subsequent occasion a firm must either:

  1. (1)

    issue a further disclosure in compliance with MCOB 13.4.1 R; or

  2. (2)

    provide, as soon as possible, and in any event within 15 business days of becoming aware of the further arrears,4 a statement, in a durable medium, of the payments due, the actual payment shortfall4, any charges incurred and the total outstanding debt excluding any charges that may be added on redemption, together with information as to the consequences, including repossession, if the payment shortfall4 is not cleared.

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Steps required before action for repossession

MCOB 13.4.5R

Before commencing action for repossession, a firm must:

  1. (1)

    provide a written update of the information required by MCOB 13.4.1 R(2), (3), (4), (5) and (6);

  2. (2)

    ensure that the customer is informed of the need to contact the local authority to establish whether the customer is eligible for local authority housing after his property is repossessed; and

  3. (3)

    clearly state the action that will be taken with regard to repossession.