Skip to main content

UK To Introduce Revolutionary Approach To Mortgage Lending

It's not just Citigroup that is dealing with trust issues. After billions of liar loan issuance helped bring the UK housing market to its knees, the FSA has decided the British cannot be trusted. With close to 1 out of every 2 mortgages made during the height of the bull market for lying two years ago based on the honor system, the FSA is expected to declare that enough is enough and call for a ban on self-cert mortgages. From now on, things are going to be different. Unthinkably high standards are going to be set. How will the nation cope when people walk into a lender and are subjected to the third degree? Even back in 2007, Jon Pain, the FSA's retail markets managing director, offered a grim view of the new world order to come.

"Given that so many self-certification mortgages have been sold ... and so many of them are now in arrears, should there be more constraints on this type of lending?" he said at the time.
"We will ask whether we should change our rules to require income verification for all mortgages, with lenders required to verify the plausibility and authenticity of the documentation provided by the customer before an offer is made."

Self-certification mortgages set to be axed []