Related provisions for MCOB 9.9.4

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MCOB 9.4.1GRP
This section sets out the required content of an illustration for an equity release transaction provided to a customer by a firm. The template of an illustration for a lifetime mortgage is set out in MCOB 9 Annex 1 and for a home reversion plan, in MCOB 9 Annex 2.88
MCOB 9.4.2RRP
An illustration provided to a customer must:(1) contain the material set out in the relevant annex to this chapter in the order and using the numbered section headings, sub-headings and text prescribed, except where this section provides otherwise;88(2) follow the format of the template in 8the relevant annex to this chapter8, with:(a) prominent use of the Key facts5 logo followed by the text 'about this lifetime mortgage' or 'about this home reversion plan'8;55(b) each section
MCOB 9.4.4RRP
A firm must include in the illustration all prescribed section headings, except that:8(1) in Section 8 of the lifetime mortgageillustration8 (What you owe and when):(a) Section 8 (A) (details of mortgage payments) is only required where the terms of12 the lifetime mortgage either:1277(i) require the customer to make regular payments to the mortgage lender, in respect of all or part of the interest or part of the capital due under those terms, either over the duration of the lifetime
MCOB 9.4.7GRP
A firm should not illustrate more than one equity release transaction8 in the same illustration, for example by using one illustration to compare alternative products.8
MCOB 9.4.10RRP
(1) In estimating the term of a lifetime mortgage or an open-ended instalment reversion plan,8 a firm must:8(a) use an estimate of the life expectancy of the customer that is reasonable and based on evidence12; and2(b) for the purposes of the illustration, where the estimate of12 life expectancy is not a whole number of12 years, the term should be rounded up to the next whole year (for example, if the life expectancy12 is between fifteen and sixteen years, an estimated term of
MCOB 9.4.17ARRP
(1) 8The requirements for a lifetime mortgageillustration are set out in MCOB 9.4.18 R to MCOB 9.4.132 R.(2) The requirements for a home reversion planillustration are set out in MCOB 9.4.133 R to MCOB 9.4.176 G.
MCOB 9.4.133RRP
8Under the section heading "About this information", the prescribed text under this heading in the home reversion planillustration must be included.
MCOB 9.4.134RRP
(1) 8Unless (2) applies, under the section heading "Which service are we providing you with?" the prescribed text in the home reversion planillustration under this heading must be included with a "check box" for each statement, one of which must be marked prominently to indicate the level of service provided to the customer;(2) If the level of service described in the illustration is provided by another firm, (1) may be replaced by the following: under the section heading "Which
MCOB 9.4.135RRP
8Under the section heading "What is a home reversion plan?", the prescribed text in the home reversion planillustration under this heading must be included.
MCOB 9.4.136RRP
(1) 8Under the section heading "What you have told us", the illustration must state the minimum information a firm must obtain from the customer (apart from details of the plan that the customer is interested in, which is in Section 5 of the illustration), and can include brief details of any other information that has been obtained from the customer and used to produce the illustration.(2) For an instalment reversion plan, where the customer requests an additional illustration
MCOB 9.4.139RRP
8Under the section heading "Description of this home reversion plan" the illustration must:(1) state the name of the reversion provider providing the home reversion plan to which the illustration relates (a trading name used by the reversion provider may also be stated), and the name, if any, used to market the home reversion plan;(2) include a statement describing the home reversion plan;(3) if the home reversion plan is linked to an investment, and payments required from the
MCOB 9.4.140RRP
8Further information about the home reversion plan may be included as long as it does not significantly:(1) duplicate information contained elsewhere in the illustration; and(2) extend the length of this section.
MCOB 9.4.142RRP
8Under the section heading "Benefits", the illustration must include:(1) a description of the monetary amount(s), and in a box aligned to the right of the document, the monetary amount(s), that the customer will receive as a lump sum and/or as a regular payment;(2) if the home reversion plan is linked to an investment and the payments required from the customer on the home reversion plan will be deducted from the income from the investment, the monetary amount of the net income
MCOB 9.4.145RRP
8The illustration must include under the heading "Risks - important things you must consider" brief statements and warnings on all material risks involving a home reversion plan, including:(1) prominently at the beginning of the section: "A home reversion is a complex property transaction. You should seek legal advice to ensure that you fully understand all of the implications for you and your home and for anyone who might otherwise inherit the property.";(2) the effect of the
MCOB 9.4.147RRP
8Under the heading "Risks - important things you must consider" the illustration must also include the following if they apply:(1) for an instalment reversion plan, a statement that if the customer dies in the early years of the plan, income payments will cease and therefore the full expected benefits of the plan will not be obtained;(2) (a) for an instalment reversion plan where there is a regular cash sum payable; and(b) where:(i) the home reversion plan is linked to an investment;
MCOB 9.4.150RRP
8Section 8 of the illustration must contain the following information:(1) a statement at the beginning of the section regarding rent and charges using the following text: "A home reversion plan is not a loan. Once you have paid the fees shown in section 9, you will only have to pay the charges shown below.";(2) the amount and frequency of annual rent, if any, to be paid by the customer; and(3) a description and the amount of other periodic charges to be paid by the customer.
MCOB 9.4.155RRP
8The following information must be provided for each fee included in this section of the illustration:(1) a description of the fee;(2) the amount payable by the customer specified in the column on the right-hand side of the section;(3) for fees included under the sub-heading "Other fees", to whom the fee is payable;(4) when the fee is payable;(5) whether or not the fee is refundable, and if so, the extent to which it is refundable;(6) which fees (if any) are estimated and based
MCOB 9.4.156RRP
(1) 8If any fees are to be deducted from the amount to be released, this must be stated alongside each fee.(2) If the customer has the option of deducting from the amount to be released any of the fees included in this section, the following text must be included: "If you wish you can deduct [this/these/the {type of fee}] fee(s) from the amount to be released under this home reversion plan. This will reduce the amount you get to £ [insert amount of the amount to be released minus
MCOB 9.4.159RRP
(1) 8Under the section heading "Insurance" the illustration must include details of:(a) insurance which is a tied product; and(b) insurance which is required as a condition of the home reversion plan which is not a tied product.(2) Under this section heading a firm may also provide details of insurance which is optional for the customer to take out.(3) It must be clear to the customer which products he is required to purchase under which circumstances (for example, where both
MCOB 9.4.160RRP
8The following information must be included if the home reversion plan requires the customer to take out insurance that is a tied product either through the reversion provider or the reversion intermediary:(1) details of which insurance is a tied product;(2) the name of the firm imposing the requirement for the insurance;(3) for how long the customer is obliged to purchase the insurance;(4) an accurate quotation or a reasonable estimate of any payments the customer needs to make
MCOB 9.4.163RRP
8The following information must be included if the insurance required, as a condition of the home reversion plan, is not a tied product:(1) a brief statement of the type of insurance the firm requires; a quotation for such insurance may be included in the illustration, estimated where necessary; and(2) if a charge is made if the customer does not arrange insurance through the reversion provider or the reversion intermediary, this must be stated, together with the amount of the
MCOB 9.4.167RRP
8Under the heading "What happens if you do not want this home reversion plan any more?", the illustration must set out whether the customer can cancel the home reversion plan and if so, explain any relevant conditions attached and costs.
MCOB 9.4.173GRP
8Any material inducements provided by a reversion provider, whether directly or indirectly, to a reversion intermediary or third party (unless the payment only reflects the cost of outsourcing work relating to the processing of home reversion applications by a firm unconnected to the reversion intermediary) must be quantified in cash terms (see MCOB 2.3.7 R). This enables the cash values to be included in the illustration.
MCOB 9.4.175RRP
8This section must: (1) follow Section 11 "What happens if you do not want this home reversion plan any more?", unless the illustration is issued by a reversion intermediary, in which case it must follow Section 12 "Using a home reversion intermediary"; and(2) include the name, address and contact point of the firm providing the illustration.
MCOB 9.9.3RRP
The statement must contain: (1) details of the following transactions during the period since the last statement (or, where it is the first statement, since the customer entered into the instalment reversion plan):(a) the date and amount of each payment made by the reversion provider; and(b) any amounts charged under the instalment reversion plan during the statement period, including fees and any amounts due in relation to tied products;(2) information at the date the statement
MCOB 9.9.8RRP
If the customer wants to release further equity from the property through a home reversion plan, the firm must treat this transaction as a new home reversion plan, even if the parties to the arrangement are the same.
MCOB 8.5A.6RRP
When a firm assesses whether the equity release transaction is appropriate to the needs and circumstances of the customer for the purposes of MCOB 8.5A.5 R, the factors it must consider include the following:(1) whether the benefits to the customer outweigh any adverse effect on:(a) the customer's entitlement (if any) to means-tested benefits; and(b) the customer's tax position (for example the loss of an Age Allowance);(2) alternative methods of raising the required funds such
MCOB 8.5A.19RRP
(1) A firm must make and retain a record: (a) of the customer information, including that relating to the customer's needs and circumstances and the customer's apparent satisfaction of the equity release provider's known eligibility criteria, that it has obtained for the purposes of MCOB 8.5A; (b) that explains why the firm has concluded that any advice given to a customer complies with MCOB 8.5A.2 R and satisfies the suitability requirement in MCOB 8.5A.5R (1); (c) of any advice
MCOB 2.6A.11GRP
A firm is unlikely, for example, to be treating a reversion occupier or SRB agreement seller2 fairly if:(1) the reversion occupier or SRB agreement seller2 is obliged to maintain the property to a standard which exceeds the standard that the property is in when the home reversion plan or regulated sale and rent back agreement2 commences;(2) the reversion occupier or SRB agreement seller2 is not entitled to, or is not given, reasonable notice of an inspection, or the inspection
MCOB 12.1.4RRP
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. 14
MCOB 12.1.5ARRP
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) 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) regulated mortgage contracts which are legacy CCA mortgage contracts secured
MCOB 2.3.7RRP
(1) A mortgage lender,3reversion provider2 or SRB agreement provider3 must quantify, in cash terms, any material inducement it offers to a mortgage intermediary, reversion intermediary,2SRB intermediary3 or a third party. 3(2) In quantifying the value of the material inducement, the firm must include any subsequent payments (such as a trail fee) made where the customer continues with the samehome finance transaction.22
MCOB 2.3.8GRP
(1) Quantification of any material inducement offered by the mortgage lender or reversion provider2 supports the disclosure requirements elsewhere in MCOB. Further guidance on the disclosure of any inducement in cash terms is provided in MCOB 5.6.118 G for regulated mortgage contracts other than lifetime mortgages, MCOB 9.4.124 G for lifetime mortgages and MCOB 9.4.173 G for home reversion plans.2(1A) Quantification of any material inducement offered by a SRB agreement provider
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) 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, for a lifetime mortgage3 the interest rate, charges, the exchange rate or the APR required by MCOB 10 (Annual Percentage Rate) at the date the illustration
MCOB 8.3.1AGRP
3The rules and guidance that are not relevant to home reversion plans are those related, for example, to interest rates, APR, higher lending charge, mortgage credit cards, multi-part mortgages and foreign currency mortgages.
FEES 4.4.9DRP
3To the extent that a firm4 has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.444
MCOB 9.1.2AGRP
2The rules and guidance that are not relevant to home reversion plans are those related, for example, to interest rates, APR, higher lending charge, mortgage credit cards, multi-part mortgages and foreign currency mortgages.
MCOB 12.5.2RRP
A firm must ensure that its charges to a customer in connection with the firmentering into, making a further advance or further release on, administering, arranging or advising on a regulated mortgage contract,2home reversion plan or regulated sale and rent back agreement2, or arranging or advising on a variation to the terms of a regulated mortgage contract,2home reversion plan or regulated sale and rent back agreement2are not excessive.1122
MCOB 12.2.1GRP
(1) Principle 6 requires a firm to pay due regard to the interests of its customers and treat them fairly. A firm is also under an obligation, as a consequence of this sourcebook's disclosure requirements,1 to make charges transparent to customers. This chapter reinforces these requirements by preventing a firm from imposing unfair and excessive charges.1(2) The level of charges under a regulated mortgage contract,2home reversion plan1 or regulated sale and rent back agreement2
MCOB 8.2.2GRP
(1) 2This chapter amplifies Principle 6 (Customers' interests), Principle 7 (Communications with clients) and Principle 9 (Customers: relationships of trust). (2) The purpose of this chapter is to ensure that: (a) customers are adequately informed about the nature of the service they may receive from a firm in relation to equity release transactions. In particular firms need to make clear to customers the range of equity release transactions available from them and the basis of
MCOB 3A.2.6RRP
Any communication, including a non-real time financial promotion, must describe: (1) any early repayment charge as an “early repayment charge” and not use any other expression to describe such charges;(2) any higher lending charge as a “higher lending charge” and not use any other expression to describe such charges;(3) any lifetime mortgage as a “lifetime mortgage” and not use any other expression to describe such a mortgage;(4) any home reversion plan as a “home reversion plan”