Tariq is two months behind on his mortgage and his cards. Viewed as a new loan, his application would not normally pass. His adviser finds a remortgage that would be cheaper and more manageable than his current mortgage. What does MCOB say?
MCOB 4.7A.20G recognises that, for a customer with a payment shortfall, a firm may still advise on a contract that is more suitable than the existing one even if, viewed as a new transaction, the customer should not be advised to take it. Advice is not banned, execution-only would be barred anyway if the main purpose is debt consolidation (MCOB 4.8A.7R(2)), and there is no rule requiring arrears to be cleared first. The lender must still meet MCOB 11.6.
Thinking a payment shortfall automatically rules out mortgage advice.
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