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Status: You are viewing the version of the handbook as on 2009-03-31.

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

MCOB 13.4.1RRP

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 FSA information sheet on mortgage arrears;

  2. (2)

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

  3. (3)

    the total sum of the payment shortfall;

  4. (4)

    the charges incurred as a result of the payment shortfall;

  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 shortfall is cleared.

MCOB 13.4.2GRP
  1. (1)

    Thecurrent FSA information sheet on mortgage arrearsis available on the FSA website, www.fsa.gov.uk; copies can also be obtained from the FSA.

  2. (2)

    In the event of the FSA making any changes to the information sheet, at least three months' notice of the changes will be given on the FSA website.

MCOB 13.4.3GRP
  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 FSA information sheet on mortgage arrearswithin 15 business days of becoming aware of the customer's account falling into arrears.

  2. (2)

    Where a firm provides the information in MCOB 13.4.1 R when a payment shortfall 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.

Customers in arrears within the past 12 months

MCOB 13.4.4RRP

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 a statement, in a durable medium, of the payments due, the actual payment shortfall, 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 shortfall is not cleared.

Steps required before action for repossession

MCOB 13.4.5RRP

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.