The review into lender and broker standards in the self-cert sector revealed that while lenders had enhanced their systems and controls, brokers had not fully embraced the guidelines set out in the FSA’s ‘Good Practice Guide’ of February 2004.
Speaking about the findings Nigel Stockton, managing director of HBOS Intermediary Mortgages, said: “This is a positive outcome for lenders and will help allay industry and consumer fears regarding self-cert practices.
The three firms found discussing how clients can inflate their salaries is three too many but it’s encouraging these findings were not widespread.”
This view was backed by Michael Coogan, director-general of the CML, who agreed lenders within the self-cert market had adapted to market and regulatory pressures. “The FSA has recognised the lending industry’s commitment to ensuring that self-certified mortgages are sold in a responsible way to those for whom they are appropriate. This is good news as self-certification is a big help to many people who do not fit traditional lending criteria,” he said.
Speaking at the Mortgage Business Expo London, Sally Laker, managing director of Mortgage Intelligence, admitted documentation practices must be improved if intermediaries are to justify the choice of
a self-cert mortgage for their client.
“It may be easy enough for intermediaries to know the information and reasons for choosing a self-cert deal but unless it is documented and filed then the FSA has no way of knowing,” she said.
Gary Dixon, director of compliance.co.uk, said: “If there is no improvement soon the FSA will undoubtedly begin to take action on a wider basis and start to use enforcement powers. The regulator has teeth and brokers should be very, very aware of that.”
