Lenders ‘filled their boots’ on non-income verified sales in run up to MMR

The FCA says lenders “filled their boots” on sales with no income verification in the build up to the Mortgage Market Review this year.

Delivering her keynote speech at the Financial Services Expo London yesterday, FCA mortgage policy manager Lynda Blackwell says product sales data for the second quarter of 2014 show a significant increase in the number of loans where income was not verified. The MMR requires lenders to verify income in all cases.

She said: “Just ahead of the MMR coming into force we saw an increase in the number of mortgages where income wasn’t verified with 20 per cent of mortgage sales in Q2 – that’s around 50,000 mortgages sold without income being verified, up from 16 per cent in Q1.

“So it looks as if there was a bit of filling of the boots going on before everything was switched off.”

Discussing the overall impact of MMR, Blackwell says it is still too assess the impact of the MMR.

She said: ”It’s probably going to take at least six months before we have clear water and can have a real good view on the impact of the MMR.”