Topic 3 - Mortgage Regulation

Question 1

Regulations for regulated mortgages, including lifetime, second-charge, CBTL, bridging loans and home reversion plans are found in…

Answer 1

…the Mortgages and Home Finance: Conduct of Business sourcebook (MCOB), which forms part of the FCA Handbook.

Question 2

The Mortgage Credit Directive (MCD)…

Answer 2

…is designed to set minimum regulatory requirements in member states for credit agreements relating to residential property.

MCOB already covered most of its requirements. New MCD sections were added where new rules were required for buy-to-let mortgages and second charges.

MCD also introduced the CBTL.

Question 3

What is a mortgage entered into after 21 March 2016?

Answer 3

A MCD regulated mortgage.

Question 4

Which types of mortgage are MCD exempt?

Answer 4

Lifetime mortgages and business BTL.

Question 5

Home purchase plans -

Answer 5

Involve the provider buying the property and then selling it to the ultimate owner via a special agremeent, either through the regular payments or capital.

(islamic)

Question 6

Consumer Protection (Amendment) Regulations have 3 main parts:

Answer 6

1. General ban on unfair commercial practices
2. Misleading and aggressive practices are assessed to determine their influence on the average consumers’ decisions
3. There is a blacklist of practices banned as they’re deemed to be unfair

Example is estate agent giving misleading information about a property they are selling.