Self cert. mortgages and remortgages were very common in the past. Now this plan whereby the self employed can declare their own profits without official proof are to be outlawed by the FSA.
Online PR News – 04-December-2009 – – Up until the bginning of 2007 self certification mortgages and remortgages were available from a number of mortgage lenders.
These self certs. as they were called, involved the prospective mortgage or remortgage borrower declaring his own income with no back up proof.
Mortgage lenders advanced these mortgaqges and remortgages with no concern as to whether the borrower could afford the repayments or not.
The FSA who regulates mortgages laboured under the belief, wronglty as it has turned out, that mortgage lenders were responsible bodies capable of self regulation.
To increase their profits very lax underwriting, especially in the self cert. field, lead to mass repossessions, as some self employed applicants greatly exaggerated their earnings to obtain mortgages and remortgages for properties they simply could not afford.
Now the FSA are to ban self certs. and mortgage lenders have until the end of January of the coming year to make comments about this situation.