My surprise, as an individual involved in the mortgage market for over 25 years, was at the thought that there were still any brokers out there naïve enough not to be aware that some lenders instruct Trigold and other sourcing systems to publicise their status products as being available on a self-cert basis – which they quite clearly should not.
The basic mistake that your broker made was to fall into the trap that fast-track is another name for self-cert. If the broker and any other readers still don’t appreciate it, fast-track is a facility within status applications that score highly enough on lenders’ credit scoring systems to be treated with minimal underwriting requirements.
As the only regulated individual involved in the mortgage element of the transaction, the broker is responsible for accurately and honestly keying the salient elements of an individual applicant’s income in the relevant boxes on the application form – basic, commission, and overtime, etc. If a broker puts all income into the basic income box and is a little ‘imaginative’ about the job title, they quickly find out that there’s ‘a way round the system’ that is designed in good faith to underwrite against what has been keyed.
Your editorial in MI (21 July, 2007) does little to point readers or the FSA at the real issues. Brokers are, as you say, shying away from self-cert – but not for the reasons you suggest. Many of them are keying self-cert business on a status basis in the hope that it will fast-track in an effort to win the business from the broker next door.
You will appreciate that to achieve the same level of borrowing potential, when compared with a self-cert application, brokers would have to overstate, consolidate or misrepresent their client’s income and possibly their job title to beat the system and achieve borrowing based on 100 per cent of their total income. But they are committing fraud, and causing clients future problems should they need a further advance at a later date.
Networks and the FSA may be misguidedly concerned about self-cert – I suggest they ask themselves where all the self-cert business has gone, because it’s still there. The more enlightened have realised that with a reduction in self-cert business and an equal increase in fast-track, it’s obvious where it has gone.
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