Mortgage Conduct of Business rules
 | This article relies largely or entirely on a single source. (December 2009) |
The Mortgage Conduct of Business rules (MCOB) govern the relationship between mortgage lenders and borrowers in the United Kingdom. They were issued by The Financial Services Authority in October 2003. They apply to Regulated Mortgage Contracts which are entered into after 31 October 2004.
A 'Regulated Mortgage Contract' is a loan on the security of a first legal mortgage on land in the United Kingdom of which at least 40% is used as or in connection with a dwelling by the borrower. This loan can be to an individual or a trustee.
The MCOB rules were designed to improve the information available to consumers and increase consumers' ability to make informed choices in the mortgage market.
They are a broad scheme of regulations covering:-
- Mortgage selling
- Communication
- Financial promotion
- Conduct of advising and selling
- Disclosure of information
- Terms of offer documents
- Duty to treat customers fairly
- Duty to keep records
- Equity release schemes
- Arrears and repossessions
- Calculation of the annual percentage rate
- Calculation of total charge for credit
- Charges
The MCOB rules apply to every firm that carries on a home finance activity. A 'firm' may be a mortgage lender, administrator, arranger or adviser. A 'home finance activity' may be a regulated mortgage contract, a home purchase plan or a home reversion plan.