UK:
Minor Amendments To MCOB Relating To Mortgage Borrowers With A Payment Shortfall
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The Financial Conduct Authority (FCA) has issued a consultation paper (CP16/16) on minor amendments
to its Mortgages and Home Finance: Conduct of Business (MCOB) rules
relating to mortgage borrowers with a payment shortfall. The
changes relate to MCOB
12.41BR and the allocation of payments received from customers who
are suffering a payment shortfall and an amendment to the glossary
definition of 'payment shortfall'.
The proposed amendments are considered necessary as a result of
the FCA's
identification of divergent practices among firms when allocating
payments received in such circumstances. The proposal is to clarify
that, when a customer is suffering a payment shortfall, the firm
must ensure that no part of any payment received from the customer
is allocated towards paying un-capitalised interest or charges
incurred because of a payment shortfall before the balance of the
payment shortfall has been cleared. The proposed new wording is set
out in the consultation paper.
For anyone wishing to respond to the consultation, the deadline
is 10 August 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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