Cemap 2 Unit 8 Flashcards
When a firm shows the annual percentage rate of charge (APRC) in a representative example for a non-real-time financial promotion, the firm must reasonably expect the APRC to apply to:
at least 51% of those who respond to the advert and take out a contract
Which of the following are requirements for initial disclosure information on a new mortgage? Select all that apply
A list of all lenders whose products the firm offers if it does not offer an unlimited service
The exact amount of any commission the firm will be paid by the lender
Which of the following statements are true of execution-only? Select all that apply.
Execution-only may be provided at the customer’s request
Execution-only is permitted when there is no interactive dialogue between the firm and the customer during the sale.
Those not permitted to proceed on an execution-only basis may reject the advice given and opt for another product.
When advising on an MCD regulated mortgage, the lender or intermediary must provide the customer with:
an adequate explanation of the recommended product
When assessing an applicant’s income, a lender
must obtain evidence of income from an independent source
Karen is about to complete an application for a £100,000 MCD regulated mortgage recommended by Jeremy, a mortgage intermediary. Jeremy will receive a procuration fee of 0.5% from the lender. With regard to the fee, Jeremy must provide Karen with a:
European Standardised Information Sheet that shows the exact amount of the fee
Argos Mortgages Ltd offers MCD regulated mortgages but wishes to use key features illustrations (KFIs) rather than the European Standardised Information Sheet (ESIS). It is true to say that Argos Mortgages Ltd:
cannot use a KFI for MCD regulated mortgages.
For how long from the date of a customer’s mortgage application must a firm keep a record of a key features illustration or a European Standardised Information Sheet?
One year.
Which of the following statements apply to an offer document for a Mortgage Credit Directive regulated mortgage? Select all that apply
The offer is subject to a seven-day reflection period for the client.
The document must state the period for which the offer is valid.
The document must state what would happen if the customer did not go ahead with the mortgage
MCOB 7 covers the disclosure requirements at the start of a new mortgage contract. At what point must the required information be provided to the borrower?
Before the first mortgage payment is made.
Which of the following is true in all circumstances in relation to unsolicited real‑time financial promotions?
They can only be made to existing customers
Alex is his firm’s marketing manager and he has just withdrawn a marketing mailshot, which will not be used again. For how long must his firm keep a copy of the mailshot?
12 months.
For how long must a firm keep a record of an execution‑only sale?
Three years.
If there is no suitable product for a customer from within the range available, the adviser can recommend the closest fit from those available. True or false?
False. The adviser must not recommend any product if there are none in the range offered that meet the client’s needs and circumstances.
Examples of the APRC shown in a financial promotion must be ‘representative’. This means that what percentage of those who respond to the promotion and those who enter into the contract advertised would be charged the quoted APRC?
51%.
Lenders cannot make provisional offers to borrowers in relation to MCD regulated mortgages. True or false?
False. An offer of advance can be provisional, but once all due diligence has been completed the final offer for an MCD regulated mortgage is binding.
The offer document must include details of the amount and dates of the initial and subsequent repayments due. True or false?
False. This information must be provided before the first payment is made on a new mortgage, a further advance or a variation to the terms of a mortgage.
