Following the publication last week of the FSA’s review into self-cert, which found in 36 per cent of cases investigated no reason was given or it was not made clear as to why the firm had recommended a self-cert mortgage, Mortgage Introducer has been informed by a broker the FSA’s regional visits to intermediary firms are concentrating predominantly on self-cert for the employed, asking firms to justify why they were recommending these deals to employed clients.
This has raised questions about how far the FSA is looking to go in tackling this issue and whether it would want to eradicate the practice of employed clients being sold self-cert products. In its earlier consultation papers it said it believed self-cert should only be for self-employed clients. The regional visits also showed the FSA was keen to establish whether firms had chec-ked the affordability of customers for mortgage deals that went beyond the normal retirement age.
Marc Hulin, director of Cornwall-based Brunel Mortgages, said: “The FSA has been making geographical visits in our area and when it came to see us there was a particular emphasis on self-cert in regards to employed clients and we were asked to justify these cases. We said they would have to have more than one source of income for them to be put on a self-cert.
“The FSA also said it would expect there to be some proof of income, like pay cheques. This is where there could be some discrepancy as most self-cert lenders don’t ask for proof of income. They just ask for a breakdown of income.”
Robin Gordon-Walker, spokesperson at the FSA, said: “There is a point within the industry that self-cert is normally for the self-employed. If the client is regularly employed, we have to ask why they are being self-certified. But the comments we made during consultation periods are not found in the MCOB rules. However, there will need to be some particular reason given as to why an employed client has been placed under self-cert.”
