ASEW · Assessment of Mortgage Advice Knowledge
In the synoptic exam, one or more of the six cases will put a customer in trouble: a lost job, a rate shock, a bereavement, a mortgage prisoner, or a client who wants you to bend the rules. Each case asks ten linked questions, so one misread fact costs several marks. Expect to calculate an interest-only concession, a capitalisation or a repossession shortfall; to pick the lawful next step under MCOB 13; to spot a banned inducement or a reporting duty; and, in the Scottish variant, to apply missives, LBTT and the Matrimonial Homes Act. The thread through all of it: deal fairly, support the vulnerable, never falsify, and repossess only as a last resort.
13 min read7 sections
Checked against: Walbrook (formerly LIBF) CeMAP specification v14 (effective July 2026), Appendix 5, ASEW/ASSC LO3 (AC3.5), LO4, LO5 (AC5.3) and LO6 (Scotland); FCA Handbook MCOB 2.3, 4.4A, 4.7A, 4.8A, 11.6, 11.8, 11.9, 13.3, 13.6, PRIN 2A, COCON 2.1; FG21/1; gov.uk SMI and power of attorney; POCA 2002 ss330, 333A; Fraud Act 2006 s2; Matrimonial Homes (Family Protection) (Scotland) Act 1981 ss6, 8; Conveyancing and Feudal Reform (Scotland) Act 1970 ss24, 24A; revenue.scot LBTT and ADS; checked 11 Oct 2026. Independent prep, not endorsed by Walbrook (formerly LIBF).
MCOB 13.3.1R requires every lender to deal fairly with a customer who has or may have payment difficulties, under a written policy agreed by its governing body. Since 4 Nov 2024 that includes a customer who tells the lender they are at risk of a shortfall, or whom the lender knows to be at risk. A customer facing a fixed-rate expiry they cannot afford is inside MCOB 13 before missing a single payment.
| Duty | Rule |
|---|---|
| Tell the customer free, impartial debt advice exists, its benefits, and where to get it | MCOB 13.3.2AR(-1) |
| Make reasonable efforts to agree how to repay, over a reasonable time | MCOB 13.3.2AR(1), (3) |
| Grant a change of payment date or method unless there is good reason; explain a refusal in writing | MCOB 13.3.2AR(4) |
| Let the customer stay a reasonable time to sell; repossess only when all else fails | MCOB 13.3.2AR(5), (6) |
| No more than two direct debit requests a calendar month | MCOB 13.3.1AR |
| Send the MoneyHelper arrears sheet within 15 business days of becoming aware of arrears | MCOB 13.4.1R |
Every note. Every question. One pass.
5 more sections of this note are part of Premium.
From ≈£2.72/mo on the Until-you-qualify pass (18 months)
Forbearance options the lender must consider (MCOB 13.3.4AR): extend the term, change the type, defer or waive capital or interest, reduce the rate or apply simple interest, capitalise, or use Government schemes. It must explain the effect on the balance and the credit file. A temporary interest-only concession is allowed for a customer in, or at risk of, arrears (MCOB 11.6.43R), and a change made only as forbearance needs no full affordability assessment (MCOB 11.6.3R).
Worked example: £168,000 at 5.1% costs £714 a month interest only, against £1,190.19 capital and interest over 18 years. For a customer who can pay £720 for six months, a six-month interest-only concession fits; a 35-year term at £858.62 does not.
Trap: waiting for a missed payment before applying MCOB 13, or offering a permanent change to fix a temporary income gap.
Takeaway: MCOB 13 starts at risk, not at arrears. Signpost debt advice, consider every forbearance option, two direct debits a month at most.
Capitalising arrears is a listed forbearance option, but a lender must not do it automatically where the impact is material: £50 or more extra interest over the term, or £1 or more on the monthly payment (MCOB 13.3.4AAR). Adding £2,380 over 18 years at 5.1% adds £16.86 a month and about £1,260 of interest, so it needs the customer’s agreement.
Support for Mortgage Interest (gov.uk, checked 11 Oct 2026) is a loan, not a benefit. It is normally paid direct to the lender and is repaid with interest when the home is sold or transferred.
In England and Wales, the Pre-Action Protocol for mortgage arrears (justice.gov.uk, updated 30 Jan 2017) sets the conduct the court expects. A lender should consider postponing a claim while the borrower properly markets the home, and must give reasons at least 5 business days before starting if it will not. Repossession is a last resort (MCOB 13.3.2AR(6)).
After a sale, the borrower still owes any shortfall on his personal covenant. Example: sale £165,000 − costs £7,400 = £157,600 against a debt of £174,600 leaves £17,000 owed. The lender must notify any intention to recover it within 6 years of the sale (MCOB 13.6.4R); the Limitation Act 1980 s20 then allows 12 years for capital and 6 for interest.
Trap: thinking SMI pays the arrears or the lender’s rate, or that handing back the keys clears the debt.
Takeaway: Capitalise automatically only below £50 and £1. SMI is a loan for interest only. Shortfalls survive repossession: notify within six years.
