ARCHIVED: This Practice Note is archived and is no longer maintained. On 31 March 2011, the European Commission (Commission) proposed for adoption, through the co-decision procedure, the Directive on credit agreements for consumers relating to residential immovable property. The Mortgage Credit Directive (Directive 2014/17/EU) (MCD) was later formally adopted by the European Parliament and the Council of the EU on 4 February 2014. The MCD was published in the Official Journal of the EU on 28 February 2014. The MCD applies equally to first and second charge mortgages and consumer buy-to-let activities. The MCD contains assumptions for the calculation of the annual percentage rate of charge (APRC). A simulator based on these assumptions is available to help users (including regulators, consumers, creditors) calculate the APRC of a given credit. According to the Commission, the MCD aims to create an EU wide mortgage credit market with a high level of consumer protection. A further aim of the MCD is to facilitate a better internal market in mortgage lending across Europe. The MCD has several objectives: • improving

This Practice Note examines how the Mortgage Credit Directive 2014/17/EU (EU MCD) was implemented in the UK and considers the impact of the UK’s withdrawal from the EU. What is the Mortgage Credit Directive? The EU MCD established a common framework of laws, regulations and administrative provisions across EU Member States concerning agreements that cover credit for consumers secured by a mortgage or otherwise related to residential immovable property. For information about the EU MCD regime, see Practice Note: EU Mortgage Credit Directive—essentials. UK implementation of the Mortgage Credit Directive HM Treasury and the Financial Conduct Authority (FCA) both consulted on how to implement the EU MCD in the UK and each published a consultation paper: • HM Treasury's September 2014 consultation paper on transposing the EU MCD included draft legislative orders for implementation • the FCA's consultation paper CP14/20: Implementation of the EU MCD and the new regime for second charge mortgages In contrast to HM Treasury's paper, which focused on the government's policy towards implementation and proposed legislative

This Practice Note focuses on the types of firm to which the Financial Conduct Authority’s (FCA’s) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) applies, how the rules vary depending on the type of customer a firm serves, and how the rules may differ based on the product being supplied. It also describes the requirements for certain general aspects of a firm's business set out in MCOB 2, as well as additional rules in MCOB 2A that implement elements of the EU Mortgage Credit Directive (Directive 2014/17/EU) (MCD). For information on other aspects of MCOB, see Practice Notes: Mortgage and home finance conduct of business—financial promotion and communications regime, Mortgage and home finance conduct of business—distribution and disclosure requirements, and Mortgage and home finance conduct of business—responsible lending, charges and arrears requirements. Background to mortgage and home finance conduct requirements On 31 October 2004 (a date known as 'M Day'), the Financial Services authority (FSA) became responsible for regulating lenders and intermediaries of regulated mortgage contracts (RMCs). Following

This Practice Note examines the Financial Conduct Authority (FCA’s) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) requirements regarding distribution and disclosure standards that apply to lenders, providers and intermediaries of regulated mortgage contracts (RMCs), home reversion plans (HRPs), home purchase plans (HPPs) and regulated sale and rent back agreements (SRBAs). Together, RMCs, HRPs, HPPs and SRBAs are referred to as home finance transactions (MCOB 1.2.2 G(1)). These requirements are predominantly detailed in chapters 4–9 of MCOB (MCOB 4–MCOB 9). This Practice Note also sets out the requirements for correctly calculating the annual percentage rate (APR) and the annual percentage rate charge (APRC) in chapters 10 and 10A of MCOB (MCOB 10 and MCOB 10A). For information on other aspects of MCOB, see Practice Notes: Mortgage and home finance conduct of business—application and general requirements, Mortgage and home finance conduct of business—financial promotion regime and Mortgage and home finance conduct of business—responsible lending, charges and arrears requirements. Purpose of MCOB advising and selling standards MCOB 4 outlines rules and guidance

This Practice Note provides an overview of the rules for financial promotions and other communications related to regulated mortgage contracts (RMCs), home purchase plans (HPPs), home reversion plans (HRPs) and regulated sale and rent back agreements (SRBAs) — collectively referred to as home finance transactions — as set out in the Financial Conduct Authority's (FCA) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB), specifically in relation to MCOB 3A and MCOB 3B. For more information on other aspects of MCOB, see Practice Notes: Mortgage and home finance conduct of business: application and general requirements, Mortgage and home finance conduct of business—distribution and disclosure requirements and Mortgage and home finance conduct of business—responsible lending, charges and arrears requirements. Application of MCOB 3A MCOB 3A applies to the communication or approval of a financial promotion relating to qualifying credit. Definitions ‘Financial promotion’ means an invitation or inducement to engage in investment activity or to engage in claims management activity that is communicated in the course of business. For the purposes of MCOB 3A it also means, any

This Practice Note provides an overview of the responsible lending and financing requirements, as well as the charges, arrears and repossessions provisions of the Financial Conduct Authority’s (FCA’s) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) as detailed in MCOB 11, MCOB 11A, MCOB 12 and MCOB 13. It also covers the Bank of England’s Financial Policy Committee (FPC) loan‑to‑income (LTI) flow limit which is in place to prevent material and unsustainable increases in household indebtedness. For further information on other aspects of MCOB, see Practice Notes: Mortgage and home finance conduct of business: application and general requirements, Mortgage and home finance conduct of business—financial promotion and communications regime and Mortgage and home finance conduct of business: distribution and disclosure requirements. Application of MCOB 11, MCOB 11A, MCOB 12 and MCOB 13 MCOB 11 The requirements in MCOB 11 relating to responsible lending and financing apply to 'mortgage lenders' (ie firms which have permission to enter into regulated mortgage contracts (RMCs) in their entirety. Home purchase plan

Family analysis: This judgment will be a useful reference for practitioners engaged in the increasing number of cases under Schedule 1 to the Children Act 1989 (ChA 1989) where the value of the assets is modest and particularly where the property to be settled is or will need to be subject to mortgage borrowing. It provides further authority to confirm that a party’s mortgage capacity is a resource and (most significantly) that ChA 1989, Sch 1 (particularly the court’s power to order a settlement of property) should be interpreted purposively in relation to the housing of children and with due recognition of the breadth of the court’s ancillary powers (paras [96]–[105]). It is also a regrettable example of parties engaging in arbitration only to have the first-instance judge decline to convert the arbitral award into a substantive order in the usual way. Ultimately, nearly two years after the final award (made in August 2022) the outcome of the appeal is the remittance of the parties’ applications (ie the father’s challenge to the award and the mother’s notice to show cause as to why it should not be upheld) for rehearing. David Wilkinson, solicitor at Slater Heelis, sets out the implications.

Banking & Finance analysis: This News Analysis discusses the case of West One Loan Ltd v Okroyan, in which the High Court held that a mortgage lender was entitled to possession of a residential property charged as security for a bridging loan, dismissing the borrower’s argument that sanctions legislation meant that its repayment obligations had been suspended.

A mortgage of goods is a transfer of ownership by way of security.

This Practice Note explains mortgagee possession claims, including the mortgagee’s right to seek possession and their duties once in possession, the mortgagor’s right to seek time to pay under the Administration of Justice Act 1970, the position of any tenants of the mortgagor, the pre-action protocol, and the procedure for making a claim. For guidance on the range of remedies available to mortgagees, see Practice Note: Mortgages and land—enforcement of mortgages and legal charges over land. The right to possession Where a mortgagor has defaulted on repayments, the mortgagee will often want to sell the property and may need to obtain possession first. However it is possible to: • sell without taking possession: sale subject to a tenancy may be particularly attractive with a commercial property that is let at a level above market rent • take possession without selling: the mortgagee may let a vacant property or collect the rent on a tenanted one. Or they may take possession first and then decide whether to sell A legal mortgagee has a right to possession of the

Dispute Resolution analysis: The High Court has confirmed that the court’s power under section 36 of the Administration of Justice Act 1970 (AJA 1970) to extend the period for delivery for possession may be exercised multiple times, such that the court could entertain an application to further extend a postponement previously granted under s 36. Having confirmed it had such power, the court went on to consider the basis of the application for a further postponement, the key test being whether the mortgagor was likely to be able within a reasonable period to pay any sums due under the mortgage. The court ordered a further three month extension but made it conditional on the mortgagor paying into court ‎£1m within 28 days of the order, so as to accommodate an anticipated shortfall in the monies that would be realised on a sale of the properties anticipated by the end of the extended period.

Investments backed by the income stream from a pool of mortgages.