From Covid 19 to MCOB 13

IMPORTANT for anyone with a mortgage, particularly at this time and likely the difficult years ahead. PLEASE SHARE. It could save your home!

I published this to my family and friends back in March, but have growing concerns that this message is not getting out there.

In the coming months and years, given the impact of Covid19 on the economy, jobs and therefore income, many with a mortgage are going to encounter difficulties making payments. 

HOWEVER, there is a very important, if not well known, FCA code that can, and will help you; 

FCA MCOB 13 – (Link to The FCA page for this code below)

Below are the key points of the code, but please read on so as to ensure that you obtain the protection you are afforded by this.

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FCA MCOB 13 screenshot (Part 1)
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As you can see, this is specific to mortgage customers that are experiencing payment difficulties, or are perhaps about tom and also mortgage customers that are ‘vulnerable’, having vulnerable persons in the home or who are relied upon by vulnerable persons.

If you are experiencing such difficulties, or believe you are going to, then follow these very simple steps listed below to ensure that you receive the protection that this code is there to provide, and don’t let the lender mislead you.

IMPORTANT: The earlier you do this, the more options and protection you have. If you can do this before you’ve missed a payment all the better, but don’t worry if you’re already behind on payments, you will still gain protection.

1. Record EVERY call that you have with your lender discussing this. The bank will be recording it anyway, so absolutely fine for you to do so also. Trust me, bank recordings have a habit of going missing when you ask for copies to support a complaint that you might have to make in the future.
TIP: Put your phone on speaker, place another phone by the side of it, and use the other phones ‘voice memo’ application to record the call.

2. Call your lender and explain that you are having, or likely about to experience, difficulties making your mortgage payment. As soon as you do this, your lender MUST abide by all of the obligations it has under MCOB 13.

3. As soon as you do this, you will receive all of the protections you’re entitled to under MCOB 13.

4. Your lender MUST help you find a solution to your difficulties. Often this will involve steps that will reduce your monthly payment, such as switching you to a different mortgage product or changing/extending the term of your mortgage.

5. Your lender MUST make you aware of, and make use of, any Government measures or schemes that might be available to you under your circumstances.

6. Your lender MUST offer you the opportunity to ‘re-capitalise’ any arrears on your mortgage. This means to add the amount of any arrears to the amount of the mortgage. This will increase the amount that you owe, but it will clear arrears. 

7. ‘Re-capitalising’ the mortgage will mean your monthly payment will increase. HOWEVER, the lender MUST then look at combining the ‘re-capitalisation’ with an extension to your mortgage or switching your mortgage product, that would bring your monthly payment back down.

8. IMPORTANT: Some of you will have taken advantage of the Mortgage Payment Holiday that was introduced by the Government. MCOB13 also applies here. For example, if after the payment holiday, your monthly mortgage payment will rise because the amount of payments missed during the holiday have been added to your mortgage (as per the ‘re-capitalisation’ mentioned above), you can explain to the lender that this increase will cause you difficulties and the lender MUST look at solutions to that issue, and that includes all of the above measures such as extending the mortgage term, switching to lower cost mortgage product etc.

9. If the circumstances are already serious and arrears are significant, you MUST still contact your lender. It obliges them to help. And whilst there might be little that can be done at this stage to salvage this mortgage, they will be forced to give you time to put the property up for sale, enabling you to try and achieve a decent market price as opposed to a repossession, where you will likely lose all equity and possibly more.

10. IMPORTANT: Some lenders will claim that in order to switch to an alternative mortgage that would lower your monthly mortgage cost, that you will have to undergo an affordability test. Often they will fail you and claim this is due to revised lending criteria introduced by Regulators/ EU etc. This criteria was introduced to prevent banks lending recklessly, but banks have used it, unlawfully in my opinion, to trap people on higher interest rate mortgages.

I say unlawfully, because:
a) Your existing lender does not have to undertake the same affordability test on you as it does a new customer. Your mortgage payment track record with them is sufficient.

b) Your existing lender cannot claim that you failed the affordability test for a new mortgage that would LOWER the monthly payments you are making. How can they argue that you can’t afford the new lower cost mortgage when you are, and have been, paying a higher monthly cost for your current mortgage?

11. MORE IMPORTANTLY ON THIS POINT, we have the Governor of the Bank of England to support this position. On October 31st 2017 Andrew Bailey, when CEO of the FCA appeared before the Treasury select Committee and was asked a question on this specific subject. His response was that:

a) Banks had been wrongly applying this affordability test to existing customers


b) It was ‘bonkers’ (His words) to deny a customer the right to switch to a lower cost mortgage on ‘affordability’ grounds. 

Here is the video of Bailey testifying to this before the Treasury Select Committee.

12. If at any time you do not have enough to make your full mortgage payment, now or in the future, and you know your direct debit is likely to fail, as well as calling the bank to discuss and to secure this protection, offer to pay per month what you can afford. This does make a difference in terms of the solutions available to you.

And, if the time comes where the position is desperate, as long as you have been making payments where you can, and have put your house up for sale to try and achieve a good sale price, most Judges will reject a repossession order because you have demonstrated an intent to pay and an intent to settle the mortgage in full by selling your home, and will likely afford you the time to find a buyer at a fair market price.

13. Having to sell your home at any time, is never ideal and is incredibly upsetting, but having the opportunity to sell it on YOUR terms as opposed to repossession will make a huge financial difference.

14. MCOB13 also contains additional provisions and protections for ‘vulnerable’ customers, or customers with vulnerable family members within the home, or that you support. So, be sure to tell this to your lender.

The important thing is to TALK to your lender. It’s not a nice position to be in, and it can be uncomfortable doing so, BUT it will make all of the difference. 

MCOBS13 is there to help you. Please make yourself familiar with it and use the protection it affords you. BUT, and I repeat again, be sure to record all calls you have with your bank.

Record these calls and YOU have the evidence of you doing exactly the right thing and exactly what you needed to do, so as to secure the protection MCOBS 13 affords you. This ensures that if your lender at any time tries to exploit you or your position, YOU have the evidence in your possession to prove that you did what you were required to do.


The banks exploited the last crisis for the financial gain and destroyed or damaged hundreds of thousands of customers. That crisis was the financial crisis that these same banks were responsible for.

If they were prepared to exploit a crisis of their making for their financial gain and the expense of the customers and taxpayers that bailed them out, do any of you really believe they will have any qualms about exploiting this crisis?

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