View more on these topics

Self-cert lenders pass buck to brokers

Self-cert lenders are insisting their affordability checks are robust after CP146 revealed brokers may carry the can for borrower arrears under regulation.

In proposals for regulating the advice process, the FSA says brokers will be responsible for assessing whether a mortgage is suitable for a customer on the grounds of “whether or not the consumer can afford the mortgage” now and in future. Although brokers will not have to verify any information, they should take a “common sense view” of what consumers tell them.

Lenders such as BM Solutions and Mortgage Express have relaxed proof-of-income criteria in a bid to win more customers. But brokers fear this does not promote true affordability assessments.

Bob Riach of Scunthorpe-based Riach Independent Financial Advisers, says: “If a borrower declares a higher income on the application form you&#39re assisting them in telling a lie. This will make brokers think twice about using no-income-proof self-cert.”

But Richard Hurst, communications manager at Future Mortgages, says: “The tick box mentality of credit scoring could create problems potentially.”

And Michael Bolton, head of mortgage marketing at BMS, says: “Borrowers get into arrears across the spectrum of products, regardless of the degree of checking. It is not reasonable to pin on an intermediary a borrower that goes into default next month because they&#39re not working as much.”


Rights and wrongs of right-to-buy

Since 1980, when council tenants were first given the right-to-buy, 1,500,000 council houses and flats have passed into private ownership. Many mortgage advisers believe the right-to-buy market has now reached saturation point and I can understand this view, as the sale of council homes has declined from a peak of 167,000 in 1982/1983 to between […]

My mortgage week – Paul Duckworth

Monday: Got to work early (around 7.00am) to prepare for today&#39s group board meeting. Managed to read up on the Sandler report and took on board the comments and views from the trade press (inc. Mortgage Strategy, of course). Spent most of the meeting discussing a pilot with a top lender for our new product, […]

Construction and property lead demand for bank lending

Demand for bank finance from construction and property companies has outstripped other sectors according to latest statistics from the British Bankers&#39 Association (BBA). The BBA&#39s annual review, Banking Business, shows that the pattern of demand from companies for bank finance has shifted in recent years, with lending to construction and property companies more than doubling […]

Portman guarantees MPPI premium rates

Portman Building Society is guaranteeing existing premium rates for borrowers who take out mortgage payment protection insurance (MPPI) following a deal with Pinnacle Insurance. With the number of job losses hitting Britain&#39s labour market, premiums for this type of insurance cover will tend to rise as insurance companies have to deal with higher numbers of […]


Health Shield joins the Association of Medical Insurance Intermediaries

Health cash plan provider Health Shield has joined the Association of Medical Insurance Intermediaries (AMII) as a corporate member. The non-profit-making Friendly Society is one of eight health cash plan providers to join the intermediary trade body, which is looking to establish working parties with intermediaries and providers on issues such as product innovation and regulation.


News and expert analysis straight to your inbox

Sign up