CeMAP MRT1 Regulated Mortgage Contracts, Borrower Types & MCOB Roles question: high net worth mortgage

CeMAP MRT1Regulated Mortgage Contracts, Borrower Types & MCOB Roles

Victoria is a high net worth mortgage customer, and the firm holds the evidence MCOB requires to treat her as one. She wants to remortgage to consolidate debts and asks to proceed without advice. Can the firm sell it execution-only?

A No, because a remortgage whose main purpose is debt consolidation can never be sold without advice, whoever the customer is
B Yes, because the ban on execution-only debt consolidation sales does not apply to a high net worth mortgage customer
C Yes, but only if she was first given advice and rejected it, which is the only exception to the ban
D No, because high net worth customers fall outside MCOB, so the firm must arrange a commercial loan

Show the answer and explanation

Answer: B. Yes, because the ban on execution-only debt consolidation sales does not apply to a high net worth mortgage customer

MCOB 4.8A.7R bans execution-only sales where the main purpose is debt consolidation, but MCOB 4.8A.9R disapplies that ban for a high net worth mortgage customer, provided the firm has the evidence required by MCOB 1.2.9C. Rejected advice (MCOB 4.8A.12R) is a separate exception, not the only one. A high net worth customer's loan is still a regulated mortgage contract, so the other execution-only rules, such as the customer specifying the product (MCOB 4.8A.14R), still apply.

Common mistake

Treating the debt consolidation ban as absolute and forgetting the high net worth exception.

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