Question mark over Beacon and self-cert
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Mystery surrounds whether Beacon Homeloans is still offering self-cert in the wake of Platform withdrawing from the self-cert sector.
Platform’s departure could leave Beacon as the last self-cert provider standing.
But the Financial Service Authority’s proposals to scrap self-cert, as announced in the Mortgage Market Review last month, have cast doubt on whether the product will continue to be offered.
A broker product guide on Beacon’s website reveals that the lender was offering self-cert rates as of September 1.
But brokers have received neither confirmation from Beacon that it is still in the market nor any communication that indicates it is reviewing its self-cert offering.
Beacon was unavailable for comment as Mortgage Strategy went to press.
Meanwhile, Platform says it plans to develop a new product that caters to the needs of self-employed people while complying with regulatory guidelines.
David Tweedy, managing director of Platform, says: “The FSA’s review makes it clear that continuing to offer self-cert in its current format is unfeasible.
“We understand the regulator’s concerns about income verification and support its aim to improve transparency in the sector.”
He adds: “But we continue to believe the industry must recognise that self-employed borrowers have circumstances that vary, and they may not always be able to provide the normal proof of income documentation required.”
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Readers' comments (3)
Anonymous | 9 Nov 2009 8:36 pm
this is fine for new borrowers but those currently on these products will now be left stuck with their current lender, if and when rates return to normal levels those forced to stay on these product will be left struggling with no option to change, another reaction thought if in a day with thinking of the consequesnces, all teh FSA and teh government do is coem up with hurdles rather than fix the problem,
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Gareth Smith | 10 Nov 2009 10:33 am
No sympathy for anyone who inflated there income in order to obatin a mortgage and will now be "stuck" with that lender.
I am sorry if i have missed something but self-cert was never introduced for a self-employed person who for years has had a low net profit to suddenly declare an higher income. Yes the net profit figure is the figure after all "expenses" incurred whilst carrying out that trade have been deducted from the income accrued over that tax year. All self employed people have to produce those figures so what is the problem. The industry has been in denial over the level of "fraudulent" applications. Just look at how many brokers have been fined for inflating there own personal incomes and you cannot tell me that if they had inflated their own they haven't for a client. On the other hand i am sure that there are many like me who have visited clients who have been on self cert deals that have ended and walked away not prepared to lie over an income only to see another broker prepared to. I welcome the FSA proposals over true income disclosure as i hope it will finally rid us of the cowboys and lead to a clen well respected industry.
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Anonymous | 13 Nov 2009 2:36 pm
I agree with Mr Smith, where client's have inflated their incomes for mortgage purposes, they should have to bear the penalty.
However, a great many client's I've spoken to were duped into declaring higher levels of income by their previous brokers, being told that 'it would be fine'. We all know that self-cert was subject to abuse, especially when some lender's took the client's word for it without even asking for proof of trading/advirtising.
The main problem for self employed client's though, has always been what they declare. Client's who self certify, and those that have accountants alike are well known to under-declare their income to reduce their tax bills, which can make it near impossible to arrange mortgages for them.
Since the release of the MMR I've heard and read lots of talk along the lines of there is no market for self employed clients. This is nonsense. So self employed client's have to provide an accounts or work to the figures they declared for tax purposes, this is exactly how it works for the rest of us. It's about time that the loophole was removed for them, and the extra margins lender's apply for self-emp cases removed as well.
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