Posted: Mon Aug 11, 2008 4:16 pm
Self-Cert Lenders are in the spotlight following a Financial Services Authority review into their conduct.
The regulator says it may refer several lenders to enforcement as a result of its inquiry, which found cases where Self-Cert was used without adequate justifications being recorded. The review involved 23 firms and cases completed in June 2007.
Self-Cert lending has been plagued by controversy because borrowers can obtain loans without proof of steady employment.
A spokeswoman for the Council of Mortgage Lenders says: "Self-Cert is perfectly reasonable for borrowers who do not have conventional means of paying their mortgages."
A key finding of the FSA review is that Lenders have failed to establish a process for assessing the reasonableness of declared consumer incomes.
The FSA says good practice would include third party confirmation of employment and income and comparing employment data against figures from the Office of National Statistics.
A spokesman for the Intermediary Mortgage Lenders Association says: "Lenders must satisfy themselves that consumers can afford repayments."
The regulator says it may refer several lenders to enforcement as a result of its inquiry, which found cases where Self-Cert was used without adequate justifications being recorded. The review involved 23 firms and cases completed in June 2007.
Self-Cert lending has been plagued by controversy because borrowers can obtain loans without proof of steady employment.
A spokeswoman for the Council of Mortgage Lenders says: "Self-Cert is perfectly reasonable for borrowers who do not have conventional means of paying their mortgages."
A key finding of the FSA review is that Lenders have failed to establish a process for assessing the reasonableness of declared consumer incomes.
The FSA says good practice would include third party confirmation of employment and income and comparing employment data against figures from the Office of National Statistics.
A spokesman for the Intermediary Mortgage Lenders Association says: "Lenders must satisfy themselves that consumers can afford repayments."