Self-certification mortgages finally extinct

The self-certification mortgage is practically extinct now since the last significant lender of this mortgage type withdraws from the mortgage market.

Part of the Co-operative Bank, Platform, is withdrawing its self-cert mortgages following the release of a paper from the Financial Services Authority (FSA) last month proposing a ban on all self-certification mortgages.

The self-cert mortgage was originally aimed at those with irregular incomes, such as the self employed or freelancers, so they didn’t have to prove their income, but following falsely inflated salaries, many of those on self cert mortgages are now struggling financially with their mortgage repayments.

Some self certification mortgages showed evidence of fraud according to the FSA and so the paper proposed that every mortgage application should require proven and verified income from the applicant.

The Mortgage Works, part of Nationwide, withdrew its self cert loans last month, Bank of Scotland and BM Solutions withdrew theirs earlier this year and now it is the turn of Platform although existing mortgage holders will continue their accounts as normal.

David Tweedy, Platform’s managing director, 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 continue to believe 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.”



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