Mortgage Rules and Regulations

What rules must mortgage advisers comply with when selling a mortgage?

The rules which mortgage brokers and advisers are required to comply with are set out in the “Mortgage and Home Finance: Conduct of Business Sourcebook” (sometimes referred to as MCOB). MCOB covers all aspects of the mortgage industry, but contains a specific chapter on the standards which are applied to people who advise clients about mortgages and sell mortgages on behalf of the mortgage provider. Under chapter 4 of MCOB advisers must:

• Take reasonable steps to ensure that any mortgage recommended is suitable for the customer (rule 4.7.2);
• When considering suitability the adviser must consider how affordable the mortgage is for the customer and any specific needs which the customer has (rule 4.7.4);
• Even if a mortgage is affordable for the customer and meets his needs, it will not be suitable if there is a better product available (i.e. the adviser must recommend the ‘most’ suitable product, not just ‘a’ suitable product.) (rule 4.7.4);
• Keep a record of all details, including the customer’s circumstances and the suitability of the mortgage for at least 3 years; (rule 4.7.17).

Because mortgage advisers are bound to abide by these rules, you may have the potential for a mis-sold mortgage claim if you feel that they were in breach when advising you on your mortgage. Mortgage compensation is generally received due to an adviser failing to follow the guidance laid out in the MCOB, meaning that any negligence in correctly assessing your eligibility or suitability for a mortgage is considered mis-selling.

Mortgage advisers are expected to act in a professional manner which is advantageous to the client as per these regulations, which is why it is possible for people to claim compensation if they feel that their mortgage adviser sought only to line their own pockets or was not sufficiently diligent.

Guide to mortgage fees

To reclaim a mis-sold mortgage payment or payment protection insurance (PPI) policy is a valuable thing for a customer to do if they have been wronged.

Insurance claims and you

An insurance claim is the application made by the customer to the insurance company after an accident, enabling them to claim compensation.

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For most, getting a mortgage is one of the biggest financial commitments of a lifetime. There has been a vast amount of coverage of their mis-selling.