According to recent reports, the Financial Services Authority (FSA) has hit out at a handful of the ‘larger’ lenders regarding their worries over how they will be find verifying the income of those with irregular income levels or the self-employed person.

Those in the self-employed arena may have been worriedly watching the movements in the mortgage market over the last year or two. Self-certification mortgages used to be the easy option for those with irregular incomes but since the credit crunch these have died out.

Earlier this week at the BSA (Building Societies Association) annual mortgage seminar, Lynda Blackwell, mortgage policy manager, said the FSA was receiving feedback that the validation of applications from these applicants would be ‘too difficult’ and that a handful of lenders have said they would:

“rather pull out than service the less straightforward consumer”

Lynda Blackwell admitted that those with irregular income may find it takes them a short while longer to acquire a mortgage than the employed with regular income, but they should still be able to prove their income.

Blackwell was quoted as saying:

“Some of the bigger firms have told us that making a basic lending decision about affordability in these cases is going to be too difficult and risky and therefore they’d rather pull out than service the less-straightforward consumer.  So they were happy to self-certify – but not assess affordability properly.

“We are asking you to do nothing more than make a realistic assessment on the facts before you in each case. If verifying income makes you think the lending is risky, isn’t that worth knowing?”

Those taking CeMAP courses or working as mortgage advisors currently may be interested to know that a consultation paper is expected in November that will cover these issues.

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