The Association of Mortgage Intermediaries (AMI) says lenders can be equally responsible for mis-selling sub-prime mortgages in response to a BBC investigation broadcast on Radio 4 last night.
The investigation for File on 4 found evidence of advisers telling self-cert mortgage customers to lie about their incomes to ensure they completed a loan deal.
However, AMI says incidents of advisers falsifying income information are rare and says lenders also need to play a part in ensuring customers are suitable for a particular product.
As reported by IFAonline, the FSA yesterday said it was winning its battle to stamp out the mis-selling after the details of the BBC investigation emerged.
Director general of AMI, Chris Cummings, claims the market for self-cert mortgages in the sub-prime sector is small an accounts for less than 5% of all intermediary mortgage advice.
He adds: “We do not condone any brokers who encourage consumers to make fraudulent applications.
"As a trade body we have produced guidance on self-certification products and encourage all brokers to carry out due diligence.“
Cummings says lenders need to take responsibility for mis-selling as well as intermediaries and comments: “The lender should ultimately be lending responsibly and while some do run plausibility tests to check a consumer’s suitability this is not universal.
"Some lenders have failed to fully enforce their responsible lending policies in the sub-prime sector in recent years”.
Cummings also cites the FSA’s report on the sub-prime mortgage industry, which found small numbers of advisers who had broken the law when selling mortgages, but said their were no widespread problems with selling mortgages incorrectly.
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