Self-Cert Mortgage Deals Disappear From the Market

Following the release of mortgage review by the Financial Services Authority in October, Co-operative lending branch - Platform bank – announced that it will withdraw its self-certification mortgage deal by the end of the week. Let us remind that the FSA proposed that all lenders verify borrowers’ income sources and carry out affordability checks. Meanwhile, self-certification mortgages that have been extremely popular with borrowers earlier, especially with self-employed mortgage applicants, mean that income sources cannot be verified and that is why lenders are quickly withdrawing this type of mortgage deals, even though the new rules of the FSA will only come into force in 2010. According to Mr. David Tweedy, managing director at Platform, the decision of the bank to withdraw its self-certification mortgage offer came after Platform’s experts carefully examined FSA’s review, which clearly stated that self-certification mortgages should be banned. Mr. Tweedy continued by saying that Platform totally understands the concerns of the Financial Services Authority, associated with income verification and supports the incentive aimed at the improvement of lending transparency. He, however, mentioned that Platform is concerned with the fact that self-employed borrowers might be placed in a disadvantaged position as oftentimes they cannot provide lenders with adequate income documentation. Mr. Tweedy highlighted that Platform has always been and always will be a bank practicing financial inclusion, which means that it will still strive to support self-employed borrowers by developing a new mortgage product that will meet new rules, set by the FSA. David Tweedy also claimed that existing borrowers of Platform who have taken self-certification mortgages earlier will not be affected by the withdrawal of the deal. It should be noted that Platform mainly specialises on mainstream mortgage products such as tracker and fixed rate deals; not more than 20% of the lender’s products are specialist.