The Financial Services Authority (FSA) has reported a mixed result following the completion of its research and mystery shopping work on self-certification mortgages.
The City watchdog says mystery shopping of 41 mortgage intermediaries found there was no systematic fraud regarding inflation of income to obtain a larger mortgage. But three firms were prepared to discuss with clients how they could inflate their salary in this way, which the regulator says it has followed up with the firms concerned. In supervisory visits the FSA found that in 47% of 249 cases reviewed the firm was unable to demonstrate it had appropriately assessed affordability. And in 36% of cases no reason was given, or the reasoning was unclear, as to why a self-certification mort...
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