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Employed self-cert clients should not be excluded

Reading Kevin Paterson’s article entitled ‘Lenders’ employed self-cert offers will come back to haunt borrowers’ (Mortgage Strategy March 5), I was disappointed to see the sort of ill- conceived criticism of our industry that is normally the preserve of the more sensationalist elements of the consumer press.

There is no doubt that self-cert has a chequered past, with 2003’s ‘Mortgage Madness’ episode representing the low ebb of confidence in the product. However, clean bills of health from three Financial Services Authority investigations into this market suggest that those times are behind us.

It is true that employed borrowers are likely to be able to provide proof of their primary PAYE incomes, but what about their second incomes? The case for allowing second incomes to be in-cluded in mortgage applications is not in doubt and with changing working patterns, it is likely that this will become more the norm.

So what do we do when an employed borrower has a second income from self-employment? Surely they should be given the same opportunities as a borrower whose primary income is self-employed, i.e. go down the standard route if you can provide conventional proof or self-certify if you can’t.

To label this ‘money laundering’ and call it ‘illegal’ is to arbitrarily exclude approximately 75,000 borrowers from obtaining mortgages every year.

The suggestion that lenders would use self-cert to allow customers to ‘stretch affordability’ bears no credibility. We decide our criteria and if we want to lend at higher income multiples and feel that this would be in our customers’ interests (and there are times when we do) we simply increase the multiples.

We have no need to do this ‘under the table’ by allowing these customers to self-certify. Ultimately, our interests in this regard are aligned with those of our customers – we want to lend to people who will be able to keep up their mortgage payments and our customers want mortgages they will be able to afford.

It is ridiculous to suggest that lenders would deliberately target customers who are likely to fall into arrears or be repossessed.

There is no doubt that brokers and lenders need to remain vigilant to abuse of self-cert but in the right circumstances there is no reason to turn employed applicants away.

Andrew Gerber
Head of self-cert mortgages
Mortgage Express
By email

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