Death of the self certification mortgage!

On Monday 19th October the FSA released its mortgage regulation discussion paper outlining proposals for the future of the mortgage market. One of its key proposals was the potential banning of ‘Self Cert’ mortgages through the required verification of applicants income.
Many in the industry such as ourselves are not surprised with this recent proposal, restricted products and criteria have all but seen the ‘self certification’ mortgage become either unavailable or financially unaffordable. However to see the total banning of such mortgages seems a touch too harsh and possibly regulation overkill.
Self Certification mortgages were originally designed to help the self employed, people with irregular income and income from various sources to be able to fund their own home. Unfortunately due to the lack of regulation the product was often abused by people wishing to artificially inflate their incomes, when in many cases that person was in a salaried role and had no need to self certify their income.
We certainly won’t argue that something needs to be done to improve the quality of lending to ensure what went wrong, won’t go wrong again. However we are concerned that with this amendment to current regulation, many existing Self Certification clients may be left in a very difficult and possibly financially precarious position, it will also exclude the many thousands of quality clients from being able to obtain a mortgages.
Of course this discussion paper from the FSA is only an indication as to what may change, however we hope that by working with the lenders and broker market a solution can be found.
Gary Wright CeMAP Partner of Mortgage Advice Network Knebworth

Gary Wright CeMAP Partner of Mortgage Advice Network Knebworth

Gary Wright CeMAP Partner of Mortgage Advice Network Knebworth

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