The review has shown that lenders' controls are generally appropriate for this business.
Self certification lending accounts for a small proportion of overall mortgage balances (about 6%). The number of customers who encounter difficulties with repayments is currently not significantly higher than those with standard mortgages. This suggests that borrowers have not been taking on larger mortgages than their income would justify.
Commenting on the review, the FSA's spokesman on Financial Crime issues, Philip Robinson, said:
“Self certification mortgages can be appropriate in certain circumstances, although our review has shown they are a small proportion of overall lending. Lenders' controls appear to be adequate in this area.
"We would remind consumers that it is a criminal act to lie on their application forms. They know how much they earn, and should state that clearly.
The FSA has reviewed the provision of self certification mortgages following allegations that consumers had been encouraged to commit fraud by regulated institutions. The review examined what controls major lenders have in place to prevent mortgage application fraud arising from income overstatement.
Should any consumers be encouraged to falsify documents, they are advised to contact the FSA's whistleblowing hotline on 020 7066 9200.
