Topic 21 Flashcards
Conduct of business requirements 2
For which type of mortgage, if any, is an authorised firm required to issue a suitability report?
a. Buy-to-let only.
b. Commercial only.
c. Residential only.
d. None.
d. None.
Which of the following types of mortgage arrangement is outside FCA regulation?
a. A second charge loan for home improvements.
b. Buy-to-let mortgages arranged by a business.
c. Home reversion plans.
d. Lifetime mortgages.
b. Buy-to-let mortgages arranged by a business.
Which of the following types of mortgage arrangement became regulated by the FCA under MCOB for the first time from March 2016?
a. Second charge loans.
b. Business buy-to-let mortgages.
c. Further advances.
d. Lifetime mortgages.
a. Second charge loans.
Which of the following is not a permitted method of attracting new mortgage customers under FCA regulations?
a. Mortgage introducers.
b. Radio advertising.
c. Unsolicited non-real-time promotions.
d. Unsolicited real-time promotions.
d. Unsolicited real-time promotions.
Pauline is offering mortgage advice to a client. Who is ultimately responsible for assuring that the mortgage loan is affordable?
The:
a. adviser.
b. adviser’s compliance department.
c. client.
d. lender.
d. lender.
After arrears have arisen, within what period should mortgage customers be provided with specific information from their lender?
a. Immediately.
b. 7 working days.
c. 15 working days.
d. 30 working days.
c. 15 working days.
For how long must a firm keep a record of a non-real-time financial promotion for mortgages after it was last used?
a) 12 months.
b) 24 months.
c) 36 months.
d) Indefinitely.
a) 12 months.
Which of the following customers would not be considered vulnerable under MCOB?
a) John, who is exercising his statutory Right‑to‑Buy.
b) Dorothy, who is applying for a lifetime mortgage.
c) Sarah, who is buying a shared-ownership flat.
d) Andy, who is entering a sale‑and‑rent‑back agreement.
c) Sarah, who is buying a shared-ownership flat.
Jane’s adviser has explained that they will only provide advice on pensions for her. This is an example of:
a) basic advice.
b) simplified advice.
c) focused advice.
d) generic advice.
b) simplified advice.
In which one of the following situations would a mortgage be classified as a consumer buy-to-let mortgage?
a) Stephen, who has just moved into his new wife’s property and intends to raise a mortgage on his own property to bring it to a standard to let out long-term.
b) Clare, who owns three rental properties and will use one as security for a mortgage to buy another rental property.
c) Clyde, who has inherited a house that needs major renovation. He needs a mortgage to complete the refurbishment before letting it out until he has decided on his next step.
d) Tim and Penny, who intend to raise a further mortgage on their property to buy a second property to rent out as a business.
c) Clyde.
When assessing affordability, MCOB considers council tax to be what type of expenditure?
a) Committed.
b) Discretionary.
c) Basic essential.
d) Cost of living.
c) Basic essential.
The lender has just discovered that Dave and Sheila are in arrears with their mortgage. Within what period must the lender write to them with specified information about the arrears?
a) 7 working days.
b) 10 working days.
c) 15 working days.
d) 30 working days.
c) 15 working days.
When a lender makes a mortgage offer, MCOB requires that the:
a) offer cannot be conditional under any circumstances.
b) offer must remain valid for at least three months.
c) borrower must be given at least seven days to decide whether to accept the offer.
d) offer is binding on the lender and the borrower.
c) borrower must be given at least seven days to decide whether to accept the offer.
In terms of mortgage regulation, which of the following is not one of the criteria for a mortgage to be regulated by MCOB?
a) The dwelling must occupy at least 40% of the land.
b) The mortgage must be secured on land.
c) The land or property must be in the UK or the European Economic Area.
d) The mortgage is taken out by an individual or trustees.
c) The land or property must be in the UK or the European Economic Area.
Mahir and Salena are arranging an interest-only mortgage, supported by an ISA, to buy their new home. What obligations does their lender have?
a) To check the performance of the ISA at least annually.
b) To insist that they have appropriate life cover in place for the mortgage.
c) To advise them on their choice of ISA or refer them to an IFA.
d) To check at least once during the mortgage term that the ISA is still in place.
d) To check at least once during the mortgage term that the ISA is still in place.
Which of the following is true regarding the Payment Services Directive?
a) Banks do not have to give third‑party providers access to accounts in order to carry out transactions.
b) In cases not involving fraud or negligence, the maximum a payer can be obliged to pay for an unauthorised payment is €150.
c) Payment service providers must respond to complaints within 15 working days of receipt.
d) Payments are not covered by the Directive if one of the payment service providers is outside the European Economic Area.
c) Payment service providers must respond to complaints within 15 working days of receipt.
For MCOB rules to apply to a residential mortgage, what minimum percentage of the land must be used, or be intended to be used, as or in connection with a dwelling?
a. 10%.
b. 40%.
c. 60%.
d. 100%.
b. 40%.
