Only one lender left offering self-cert
News Article Date: Wednesday 04th of November 2009
Platform, the intermediary lender of the Co-operative Bank, has announced that it is quitting the self-certification (self-cert) mortgage market, leaving Beacon Homeloans as the only active provider in the sector.
Self-cert mortgages, which allow borrowers to simply state their income without proving it on applying for a loan, came under fire in a recent review of the mortgage market published by the Financial Services Authority (FSA).
Many lenders withdrew their self-cert mortgages as soon as the review was published on 19th October. Platform and Beacon both said they wanted to digest the content of the paper before making a decision.
Platform announced today that it will cease offering self-cert deals this Friday.
David Tweedy, managing director at Platform said:
"The FSA Mortgage Market review paper has shown that continuing to offer self-certification mortgages in its current format is unfeasible and after careful deliberation of the paper, Platform has now taken the decision to withdraw from the self certification market.
“We understand the FSA’s concerns around income verification and fully support its aims to improve transparency in the industry. However, we continue to believe that the industry must recognise that self employed people can have different circumstances and may not always be able to provide the normal proof of income documentation required.
“As a lender which prides itself on financial inclusion Platform remains committed to supporting self-employed people and will now work with the sector with a view to developing a new product that meets the FSA’s guidelines.
”All our existing self-certification customers will not be affected by our withdrawal from the market, on 6th November, and their accounts will continue to run as normal.”
The FSA has asked the industry to respond to the content of its review paper by the end of January 2010, and agreed recommendations will be implemented after that date.
Industry experts have expressed concern that so-called ‘fast-track’ mortgages, where lenders do not verify the income details of mortgage applicants with extremely large deposits, will be lost by the wayside if the FSA outlaws self-cert mortgages altogether.
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