Home Equity CreditEquity Home Credit
Second-party credits that were previously governed by the credit system for consumers have been incorporated into our mortgages system and are governed by the Handbook Corporate Conduct of Business (MCOB). MCOB safeguards that are applicable during the term of the credit, such as: are applicable to current subsidised credits and to all new credits.
Unless you have the appropriate authorization, you must cease this regulated business (including maintaining or managing backbook loans) or you will work unlawfully and commit crimes. To manage a chargeback of equity or second mortgage credits and/or grant new credits and retain these credits, you must obtain approval.
Mortgages are the type of permits that clients may need, according to the type of activity being regulated: When you have a common equity or subordinated loan chargeback and do not intend to grant new loan, you can hire a third person who has the necessary authorization to manage your chargeback.
In this way, clients can keep their supplements without having to directly obtain administrative approval. Currently, if you are holding a common equity or subordinated debt and do not plan to provide these debt facilities in the near term, one way would be to amortize the debt and free the second fee on the land.
However, in the case of projects between the state and the client (e.g. HomeBuy Direct and FirstBuy), the indemnity only applies to the state part. When you are a developer, you must consider the above mentioned option for your own share. Supplementary credits that have been exempted from tax under the system of credit for consumers shall continue to be so.
Further possible exceptions can be found in our manual. We offer webinars (link is external) and flowcharts to help clients better comprehend the changes and choices they need to make.