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Status: You are viewing the version of the handbook as on 2005-06-30.

MCOB 9.5 Disclosure at the offer stage for lifetime mortgages

MCOB 9.5.1RRP
  1. (1)

    MCOB 6.1 to MCOB 6.6 (with the modifications stated in MCOB 9.5.2 R to MCOB 9.5.4 R) apply to a mortgage lender where the regulated mortgage contract is a regulated lifetime mortgage contract.

  2. (2)

    The table in MCOB 9.5.2 R shows how the relevant rules and guidance in MCOB 6 must be modified by replacing the cross-references with the relevant cross-references to rules and guidance in MCOB 9.4, and MCOB 9.5.

  3. (3)

    The table in MCOB 9.5.3 R replaces certain rules and guidance in MCOB 6 with rules and guidance from MCOB 9.5.

MCOB 9.5.2RRP

Table of modified cross-references to other rules:

This table belongs to MCOB 9.5.1 R.

Subject

Rule or guidance

Reference in rule or guidance

To be read as a reference to:

Application: What?

MCOB 6.1.5R

MCOB 6

MCOB 6 as modified by MCOB 9.5

Content of offer document

MCOB 6.1.6G

MCOB 5.6

MCOB 9.4

Purpose

MCOB 6.2.1G

MCOB 6

MCOB 6 as modified by MCOB 9.5

General

MCOB 6.3.2R

Records

MCOB 6.4.3R

Modifications to the illustration

MCOB 6.4.5G

MCOB 6.4.4R(5)(b)

MCOB 9.5.4R(6)(b)

Modifications to the illustration

MCOB 6.4.6R

MCOB 6.4.4(1)

MCOB 9.5.4R(1)

Modifications to the illustration

MCOB 6.4.6R(1) and (2)

MCOB 5.6

MCOB 9.4

Modifications to the illustration

MCOB 6.4.7R

MCOB 6.4.4R(1)

MCOB 9.5.4R(1)

Modifications to the illustration

MCOB 6.4.7R(2)

MCOB 5

MCOB 9

Modifications to the illustration

MCOB 6.4.7R(3)

MCOB 5.6.73R to MCOB 5.6.83G

MCOB 9.4.72R to MCOB 9.4.82G

Modifications to the illustration

MCOB 6.4.7R(3)

MCOB 5.6.92R to MCOB 5.6.112G

MCOB 9.4.91R to MCOB 9.4.110R

Other information contained in the offer document

MCOB 6.4.13R

MCOB 5.6.122R

MCOB 9.4.126R

Offer documents in place of illustrations

MCOB 6.6.1R

MCOB 5.4 and MCOB 5.5

MCOB 5.4 and MCOB 5.5 as modified by MCOB 9

MCOB 9.5.3RRP

Table of rules in MCOB 6 replaced by rules in MCOB 9:

This table belongs to MCOB 9.5.1 R

Subject

Rule

Rule replaced by

Modifications to the illustration

MCOB 6.4.4R

MCOB 9.5.4R

MCOB 9.5.4RRP

The illustration provided as part of the offer document in accordance with MCOB 6.4.1 R(1) must meet the requirements of MCOB 9.4, with the following modifications:

  1. (1)

    the illustration must be suitably adapted and revised to reflect the fact that the firm is making an offer to a customer and updated to reflect changes to, for example, the interest rate, charges, the exchange rate or the APR required by MCOB 10 (Annual Percentage Rate) at the date the illustration is issued;

  2. (2)

    the illustration must be based on the example term estimated in accordance with MCOB 9.4.10 R;

  3. (3)

    MCOB 9.4.2 R(2)(a) does not apply;

  4. (4)

    MCOB 9.4.17 R (Information to be included at the head of the illustration) does not apply;

  5. (5)

    MCOB 9.4.18 R (Section 1: 'About this information') is replaced by the following: "Section 1: 'About this offer document'. Under the section heading 'About this offer document', the following text must be included:

    1. (a)

      "You are not bound by the terms of this offer document until [insert relevant circumstances, including the names of any documents that must be signed. For example "you have signed the legal charge and the funds are released for your lifetime mortgage"]. We are required by the Financial Services Authority (FSA) - the independent watchdog that regulates financial services - to provide you with this offer document."

    2. (b)

      (unless MCOB 6.6.1 R applies)"You should compare this offer document with the key facts illustration given to you before you applied for this lifetime mortgage, to see how the details may have changed."

  6. (6)

    Unless (b) applies, MCOB 9.4.19 R (Section 2: 'Which service are we providing you with') is replaced with the following: "Section 2: 'Which service did we provide you with?'

    1. (a)

      Under the section heading 'Which service did we provide you with?' the following text should be presented as two options each with a 'check box', one of which must be marked prominently to indicate the level of service provided to the customer: "We have recommended, having assessed your needs, that you take out this lifetime mortgage.We have not recommended a particular lifetime mortgage for you. You must make your own choice whether to accept this lifetime mortgage offer.";

    2. (b)

      If the service described in MCOB 9.4.19 R (Section 2: 'Which service are we providing you with?') was provided by another firm, MCOB 9.4.19 R is replaced by the following:"Section 2: 'Which service were you provided with?'Under the section heading 'Which service were you provided with?' the following text should be presented as two options each with a 'check box' one of which must be marked prominently to indicate the level of service provided to the customer:"[name of firm] recommended that you take out this lifetime mortgage.[name of firm] did not recommend a particular lifetime mortgage for you. You must make your own choice whether to accept this mortgage offer.";

  7. (7)

    the fees recorded in the illustration that is part of the offer document in accordance with MCOB 9.4.65 R(1) must include any fees paid or payable by the customer;1

  8. (8)

    MCOB 9.4.68 R(5) is replaced by the following:"(where the fee is payable or has been paid to the mortgage lender), whether or not the fee is refundable, and if so, the extent to which it is refundable";

  9. (9)

    details of insurance which the customer has chosen to take out through the firm, whether or not this insurance was included in the illustration provided in accordance with MCOB 9, must be included in Section 12 of the illustration that is part of the offer document;

  10. (10)

    where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities regulated by the Consumer Credit Act 1974, the relevant parts of Section 14 of the illustration that is part of the offer document must include the following text:"This credit facility is regulated under the Consumer Credit Act 1974. Please refer to the separate credit agreement which describes the facility and the terms on which the credit is available.";

  11. (11)

    The text required by MCOB 9.4.102 R(2)(a) or (b) should be adapted to include, or tell the customer where they can find, the information required by MCOB 6.5.4 R; and

  12. (12)

    MCOB 9.4.119 R and MCOB 9.4.120 R apply to the illustration that is part of the offer document if the illustration given out in accordance with MCOB 9 was issued by, or on behalf of, a mortgage intermediary.