Brokers say they are not surprised by damaging revelations about inflated income in self-certification applications, following last week's exposé in The Money Programme.
The BBC documentary last week revealed mortgage advisers including branch staff encouraging reporters posing as mortgage applicants to vastly exaggerate their income in order to secure larger loans. The revelations have shocked many in the industry but some brokers say the problem has been facilitated by lenders' lax attitudes to proof of client income.
Kim Barrett, proprietor at KS Barrett & Associates, says: ” It's too easy to self-certify as lenders don't do many checks. I hear rumours of this kind of mis-selling going on all the time. We need to get rid of the 'sales' element within this industry so advisers don't feel pressurised to abuse the system.”
Jim White, managing director of Jim White's Mortgage Solutions, says: “The industry needs to address this problem. The number of lenders offering self-cert mortgages has increased significantly over the past two years and this has resulted in lending criteria being relaxed. The term 'no proof of income' has no clear definition.”
Jonathan Burridge, director at Quantum Mortgage Brokers, adds: “This should be taken as a wake-up call to advisers and lenders.”