CeMAP 2 - Topic 21/22

Question 1

The suggested range of stakeholder-type products have a proposed level of charges limited to what MAXIMUM percentage for the first ten years?

Answer 1

1.5%

Question 2

Joe, who is taking out a mortgage that falls withing FCA regulation, has just received his customer specific illustration. This means that he is at what stage of the mortgage application process?

Answer 2

He has not yet completed the mortgage application form

Question 3

If a customer decides that they want to cancel their general insurance contract within the cooling off period, they must do so within:

Answer 3

14 days

Question 4

If a customer cancels their general insurance contract within the cooling off period, the insurance company must return any sums to it, within how many days?

Answer 4

30 days

Question 5

Tina, a mortgage adviser, is assessing the suitability of a mortgage for her client. She will take into account all of the following except:

Answer 5

Selecting the most appropriate property type for her client

Question 6

All of the following are arranging mortgages after October 2004. Which mortgage is NOT regulated by the Financial Conduct Authority?
Joint borrowers
Sole borrower
Public Limited Company
Trustees creating a mortgage

Answer 6

Public Limited Company

Question 7

Tom, a mortgage adviser, has to satisfy additional training and competence requirements under the Financial Conduct Authority regulation because he offers advice on:

Answer 7

Lifetime mortgages

Question 8

A mortgage offer document must state how long the offer is valid for and how the customer can withdraw from the contract once the mortgage has completed, True or False?

Answer 8

False

Question 9

MB Ltd have just offered advice, post-October 2004, to a residential mortgage client and have NOT yet issued a suitability letter. This is permitted because:

Answer 9

There is no FCA requirement for issuing of mortgage suitability letters

Question 10

Which of the following will not be included in an initial disclosure document?
Product recommendations
Complaints procedure
Name of regulator
Services offered

Answer 10

Product recommendations

Question 11

When MUST the Initial Disclosure Document (IDD) be provided by a mortgage adviser?

Answer 11

At the start of the first meeting with a prospective client

Question 12

Bruce has found that the mortgage he is arranging post-October 2004 and which is secured by a first charge is NOT regulated by the FCA. this is because:

Answer 12

He is using the mortgage to buy a property as a commercial venture to let out to tenants

Question 13

The creation of stakeholder products outlined what KEY proposal for the industry?

Answer 13

The development of simple, low cost risk-controlled products that would appeal to the less financially sophisticated

Question 14

Where MCOB rules apply to a residential mortgage, what minimum percentage of property must by occupied as a residence by the borrower?

Answer 14

40%

Question 15

MB Ltd has found that their primary method of obtaining new business is NOT permitted under FCA regulation. This means that they have been using which method?

Answer 15

Cold Calling

Question 16

In respect of mortgage advice, which of the following pieces of information is NOT required as part of the initial disclosures under MCOB 4?
Fees associated with the service
Arrears arrangements
Complaints and compensation details
The providers of mortgages under discussion

Answer 16

Arrears arrangements

Question 17

Paul is offering mortgage advice to a client. Who is ultimately responsible for assuring that the mortgage is affordable?

Answer 17

The lender

Question 18

What type of mortgage became regulated by the FCA under MCOB for the first time from March 2016?

Answer 18

Buy to let mortgages for consumers

Question 19

A firm intends to make a series of cold calls to promote certain mortgage contracts. What rule applies?

Answer 19

Cold calls are not permitted

Question 20

Which of the following is exempt from provisions of the Consumer Credit Acts of 1974 and 2006?
Credit card limit of £5000
A further advance for home improvements
An authorised overdraft
An unsecured loan

Answer 20

A further advancement for home improvements

Question 21

The maximum size of loan, if any, regulated by the Consumer Credit Act is:

Answer 21

Unlimited

Question 22

Dan, an adiviser, is required under FCA rules to provide a European Standardised Information Sheet (ESIS) detailing the APRC to his client. This confirms that the client has expressed an interest in:

Answer 22

Mortgage business

Question 23

Tony is in the process of applying for a mortgage and he has just received a tariff of charges from the lender. What is the latest point in the process that he has reached?

Answer 23

Offer stage

Question 24

What must be included on all quotations for loans regulated under the Consumer Credit Act?

Answer 24

The annual percentage rate

Question 25

Jack and Julie have an interest only mortgage and have received written advice to check the performance of their repayment vehicle. Under MCOB rules, this is most likely to have been issued by:

Answer 25

Their mortgage lender