Cheshire suspends mortgages to self-employed
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Cheshire Mortgage Corporation, part of the Blemain Group has become the latest lender to suspend its self-employed plans.
The lender sent out an email to brokers this morning saying it continues to experience greater than anticipated volumes of business as a result of Beacon’s decision to withdraw from the mortgage market.
It says: ”We endeavoured not to over commit our resources in November and decided to suspend some of the Cheshire Mortgage Corporation plans for a temporary period. As the anticipated volumes have already been exceeded, to manage the levels of business efficiently, with immediate effect we have decided to extend this suspension to all self-employed applicants.
“Only clients that derive an income from employment, DSS benefits or pensions will be accepted, and only income from these sources will be accepted for the purposes of affordability.”
The suspension of self-employed applicant plans also applies to any current pipeline business.
Any pre-offer cases with self-employed applicants will be declined, unless the clients can afford the mortgage based on employed, DSS benefit or pension income.
Any post-offer cases with self-employed applicants will be reviewed over the next few days and brokers will be notified of a final decision.
Platform and Beacon Homeloans have both recently withdrawn from the self-cert market.
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Readers' comments (16)
Kevin friend | 9 Dec 2009 12:41 pm
This decision can anly make sense if the group have issues with the quality of business written t self employed borrowers. It has nothing to do with self Certification. I maintain that there is still good business to be written for self employed applicants who pay tax and have accountants! There is no security in being employed anymore.
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CB | 9 Dec 2009 12:51 pm
Fantastic. So if you have the gumption to get off your backside and work for a living you cannot get a mortgage, but if you lounge around on a sofa watching TV all day you can.
What a great message for our kids.
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Mike Fitzgerald | 9 Dec 2009 12:52 pm
I agree with kevin. The Self employed now have more employment security than employed.If you were a lender who would you feel safer giving a mortgage to. A self employed Plumber or somebody who works for a lender.or for that matter a member of Parliament.This financial crisis was caused by dubious and dodgy bankers buying billions of pounds of Toxic debts.thsi is one crisis that you cant blame on self certification.
Mike Fitzgerald-the EMBA Group Ltd
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Anonymous | 9 Dec 2009 1:08 pm
I am self employed and employ a number of people. They can have a mortgage but I can't. That makes sense.
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Anonymous | 9 Dec 2009 1:44 pm
It is nothing to do with the lenders. Read my lips! The FSA and others would like the "self-employed" to be more open about their income i.e. declare all the income, so more revenue for the tax man and all the government buddies. Ordinary sel-employed cannot afford those tax "hiding" schemes like the super-rich!
This is yet another nail in the self-employed coffin. Best advice is to get a job, get a big mortgage and then become self-employed. Any takers?
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David Penny | 9 Dec 2009 1:47 pm
If the FSA listened to those people that actually understand the mortgage market rather than those that dwell in there Ivory Towers, then perhaps then they could get informed decisions which will help the industry rather than hamper its recovery. Given the current yeilds achievable on funding a lender could lend themselves back into a positive position ...so FSA wake up & smell the coffee, stop listening to that sham of a government & do something positive for a change
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Chris Doran | 9 Dec 2009 1:53 pm
I concur with all of the comments above. The lender's decision, however, is discriminatory and should be challenged on that basis. A self employed applicant may well have the ability to verify satisfactory income.
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Anonymous | 9 Dec 2009 2:02 pm
I wonder if Blemain will refund the valuation fees for those clients who are affected ?????
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Anonymous | 9 Dec 2009 2:34 pm
How on earth did we reach a state of affairs where DSS applicants are deemed more worthy than the self-employed? This is total and utter lunacy and beggars belief. If a lender had turned around and said that they would not lend to people of a particular ethnicity then they would be immediately attacked from all quarters. How is this not discriminatory?
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bill wells | 9 Dec 2009 2:36 pm
Extraordinary ! A lender that cannot establish the diffence between a self-employed applicant with 3 year's of accounts and someone who wishes to self-certify (for whatever reason).
So someone who has run a successful business for many years and can, perhaps, prove earnings massively in excess of the normal affordability criteria can't get a mortgage, but someone who has been employed in excess of any probationary period (and who could be laid off at any time) can obtain funding.
What a sick joke !
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