1 / 41

MMR Quiz

MMR Quiz. Based on Policy Statement PS12/16. Question 1. From which date do the main changes detailed in PS12/16 take effect? 31December 2013 26 April 2014 15 June 2014 31 July 2014. Question 1. From which date do the main changes detailed in PS12/16 take effect? 31December 2013

mbasquez
Download Presentation

MMR Quiz

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MMR Quiz Based on Policy Statement PS12/16

  2. Question 1 From which date do the main changes detailed in PS12/16 take effect? • 31December 2013 • 26 April 2014 • 15 June 2014 • 31 July 2014

  3. Question 1 From which date do the main changes detailed in PS12/16 take effect? • 31December 2013 • 26 April 2014 • 15 June 2014 • 31 July 2014

  4. Question 2 Which of the following is not described as one of the key elements of responsible lending reforms? • The vulnerable customer provisions • The affordability assessment • The interest only stress test • The interest only rules

  5. Question 2 Which of the following is not described as one of the key elements of responsible lending reforms? • The vulnerable customer provisions • The affordability assessment • The interest only stress test • The interest only rules

  6. Question 3 In what way might the Mortgage Credit Directive affect the MMR changes? • It won’t as the MCD is set at a more higher level than the MMR • Some possible changes in scope of regulations • Possible additional disclosure requirements • Both (b) and (c)

  7. Question 3 In what way might the Mortgage Credit Directive affect the MMR changes? • It won’t as the MCD is set at a more higher level than the MMR • Some possible changes in scope of regulations • Possible additional disclosure requirements • Both (b) and (c)

  8. Question 4 On 26 October 2012 MCOB11.8.1.E introduced a new evidential provision to protect borrowers who find themselves trapped. A lender who fails to comply with this ruled will contravene? • Principle 1 for businesses • Principle 3 for businesses • Principle 6 for businesses • Principle 7 for businesses

  9. Question 4 On 26 October 2012 MCOB11.8.1.E introduced a new evidential provision to protect borrowers who find themselves trapped. A lender who fails to comply with this ruled will contravene? • Principle 1 for businesses • Principle 3 for businesses • Principle 6 for businesses (TCF) • Principle 7 for businesses

  10. Question 5 Which of the following statements is true? • Every conversation with a customer will be construed as providing advice • Pre-screeners used to background information and provide general information to customers prior to a sale commencing must have a level 3 qualification • Regulated advice is when a firm steers a customer towards a particular identifiable product that the customer could enter into • All contract variations are subject to the advice rule requirements irrespective of which communication channel they arrive through

  11. Question 5 Which of the following statements is true? • Every conversation with a customer will be construed as providing advice • Pre-screeners used to background information and provide general information to customers prior to a sale commencing must have a level 3 qualification • Regulated advice is when a firm steers a customer towards a particular identifiable product that the customer could enter into • All contract variations are subject to the advice rule requirements irrespective of which communication channel they arrive through

  12. Question 6 All mortgages sellers are required to be registered as approved persons. This will be effective from the same date as the main MMR changes TRUE or FALSE?

  13. Question 6 All mortgages sellers are required to be registered as approved persons. This will be effective from the same date as the main MMR changes TRUE or FALSE?

  14. Question 7 For existing customers all contract variations can be treated as execution only to help ensure that they are not trapped by the new affordability and interest only regulations TRUE or FALSE?

  15. Question 7 For existing customers all contract variations can be treated as execution only to help ensure that they are not trapped by the new affordability and interest only regulations TRUE or FALSE?

  16. Question 8 Of the following contract variations, where there is no increase in the balance outstanding which is constituted as advice? • The firm presents all the products for which the borrower is eligible via a non interactive channel. The borrower selects their product via a non interactive channel • The firm presents all the products for which the borrower is eligible via a non interactive channel, but accepts the borrowers choice of product via an interactive channel • The firm steers the borrower to a particular product or products (interactive or non interactive) • The removal of a party to a contract

  17. Question 8 Of the following contract variations, where there is no increase in the balance outstanding which is constituted as advice? • The firm presents all the products for which the borrower is eligible via a non interactive channel. The borrower selects their product via a non interactive channel • The firm presents all the products for which the borrower is eligible via a non interactive channel, but accepts the borrowers choice of product via an interactive channel • The firm steers the borrower to a particular product or products (interactive or non interactive) • The removal of a party to a contract

  18. Question 9 In which of the following scenarios will an affordability check normally be required? • There is an increase in the amount borrowed • The term of the loan is extended beyond the borrower’s expected retirement • The type of repayment is changed • A party is removed from the contract

  19. Question 9 In which of the following scenarios will an affordability check normally be required? • There is an increase in the amount borrowed • The term of the loan is extended beyond the borrower’s expected retirement • The type of repayment is changed • A party is removed from the contract

  20. Question 10 Lenders can make decisions about exceptions to the affordability and interest only rules for existing customers providing that there is no increase in the amount outstanding and • There are no material changes to affordability • The borrower wishes to move their mortgage to another lender • The proposed transaction is in the customer’s best interests • The regular payment under the mortgage is not increased

  21. Question 10 Lenders can make decisions about exceptions to the affordability and interest only rules for existing customers providing that there is no increase in the amount outstanding and • There are no material changes to affordability • The borrower wishes to move their mortgage to another lender • The proposed transaction is in the customer’s best interests • The regular payment under the mortgage is not increased

  22. Question 11 Under the transitional arrangements additional funds can be advanced for essential maintenance work. Which of these is not a requirement of this? • The value of the property is at risk if the repairs or maintenance work are not carried out • The additional borrowing is to be used for repairs and maintenance • The firm has credible evidence of the cost of the repairs or maintenance • The borrower must provide a revised property valuation after the repairs have been completed

  23. Question 11 Under the transitional arrangements additional funds can be advanced for essential maintenance work. Which of these is not a requirement of this? • The value of the property is at risk if the repairs or maintenance work are not carried out • The additional borrowing is to be used for repairs and maintenance • The firm has credible evidence of the cost of the repairs or maintenance • The borrower must provide a revised property valuation after the repairs have been completed

  24. Question 12 The transitional arrangements apply to existing borrowers who have a mortgage in place when the MMR rules come into place but not to borrowers with mortgages that were entered into before the introduction of mortgage regulation in 2004. • TRUE or FALSE?

  25. Question 12 The transitional arrangements apply to existing borrowers who have a mortgage in place when the MMR rules come into place but not to borrowers with mortgages that were entered into before the introduction of mortgage regulation in 2004. • TRUE or FALSE?

  26. Question 13 If the transitional arrangements are not applied which event for an existing borrower triggers an affordability check despite the fact that there is no increase in the amount borrowed • The mortgage is switched from an interest only to repayment • The mortgage is ported to another property • The rate applied to the mortgage increases the regular monthly payment • The mortgage term is extended but not beyond the borrower’s retirement age

  27. Question 13 If the transitional arrangements are not applied which event for an existing borrower triggers an affordability check despite the fact that there is no increase in the amount borrowed • The mortgage is switched from an interest only to repayment • The mortgage is ported to another property • The rate applied to the mortgage increases the regular monthly payment • The mortgage term is extended but not beyond the borrower’s retirement age

  28. Question 14 The minimum net income requirement for a HNW mortgage customer has been reduced for £1M to • 600,000 • 500,000 • 300,000 • 250,000

  29. Question 14 The income net income requirement for a HNW mortgage customer has been reduced for £1M to • 600,000 • 500,000 • 300,000 • 250,000

  30. Question 15 As an alternative to a minimum net income a mortgage HNW customer could have minimum net assets of • £2M • £3M • £4M • £5M

  31. Question 15 As an alternative to a minimum net income a mortgage HNW customer could have minimum net assets of • £2M • £3M • £4M • £5M

  32. Question 16 The FSA is not prescriptive about the assets that can be taken into consideration in making up the minimum net figure of £3M. You can include the mortgaged property net of any outstanding mortgage TRUE or FALSE?

  33. Question 16 The FSA is not prescriptive about the assets that can be taken into consideration in making up the minimum net figure of £3M. You can include the mortgaged property net of any outstanding mortgage TRUE or FALSE?

  34. Question 17 Which is not true in respect of a mortgage HNW customer? • Firms can use the full MCOB requirements or tailored HNW requirements but not mix and match • A mortgage HNW customer can use an execution only basis even if the sale involves a degree of interaction • HNW are expected to provide required details about the product to proceed on an execution only basis. • Mortgage HNW customers are not required to get advice even if they fall within the vulnerable customer categories

  35. Question 17 Which is not true in respect of a mortgage HNW customer? • Firms can use the full MCOB requirements or tailored HNW requirements but not mix and match • A mortgage HNW customer can use an execution only basis even if the sale involves a degree of interaction • HNW are expected to provide required details about the product to proceed on an execution only basis. • Mortgage HNW customers are not required to get advice even if they fall within the vulnerable customer categories

  36. Question 18 For a credit impaired borrower who must receive advice when utilising debt consolidation, when determining affordability the lender can choose which option • To take reasonable steps to ensure that debts to be consolidated are repaid • Assume that the debts to be consolidated remain outstanding and factor their cost into affordability calculations • Either (a) or (b)

  37. Question 18 For a credit impaired borrower who must receive advice when utilising debt consolidation, when determining affordability the lender can choose which option • To take reasonable steps to ensure that debts to be consolidated are repaid • Assume that the debts to be consolidated remain outstanding and factor their cost into affordability calculations • Either (a) or (b)

  38. Question 19 The MMR changes requires interest only mortgages to be subject to a review during the term of the mortgage. This applies to • All interest only mortgages irrespective of when they were first taken out • All interest only mortgages taken out since mortgage regulation was first introduced • All interest only mortgages with at least 10 years left to maturity when the MMR changes become effective • All interest only mortgages taken out after the MMR changes are introduced

  39. Question 19 The MMR changes requires interest only mortgages to be subject to a review during the term of the mortgage. This applies to • All interest only mortgages irrespective of when they were first taken out • All interest only mortgages taken out since mortgage regulation was first introduced • All interest only mortgages with at least 10 years left to maturity when the MMR changes become effective • All interest only mortgages taken out after the MMR changes are introduced

  40. Question 20 For a joint application where only one applicant is a mortgage professional, the non-professional applicant • Can elect an interactive execution only route • Must be advised and is not permitted an execution only route

  41. Question 20 For a joint application where only one applicant is a mortgage professional, the non-professional applicant • Can elect an interactive execution only route • Must be advised and is not permitted an execution only route

More Related