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4,000 borrowers contact controversial self-cert lender in 48 hours

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Controversial new lender selfcert.co.uk claims over 4,000 borrowers have registered an interest in the two days since it launched.

The start-up, which launched on Monday, is backed by private equity investors and is based in the Czech Republic.

It is reportedly offering a tracker loan set at 2 per cent above base rate and will lend up to £500,000 at 85 per cent loan-to-value with fees of around £600. However, this cannot be verified as its website is not functioning.

A statement on its website says: “Due to demand we are having a few issues with our new site at the moment. The site will be live today, Wednesday 20th of January.

“We do apologise but we won’t be able to satisfy demand for the vast majority of those that have already contacted us. We are very very sorry but if you haven’t already emailed or called us, we won’t be able to provide any assistance this time. We are working with others to try and increase capacity.

“We’ve had over 4,000 people contact us in the first two days and register an interest with us. We are working through these and will contact all of these people within the next 72 hours.”

Self-cert mortgages, where borrowers do not have to prove their income, were hugely popular up until they were banned by the Mortgage Market Review.

The ban is still in place for FCA-regulated lenders but selfcert.co.uk owner Graeme Wingate, founder of unsecured lender Quick Loans, got round the rules by setting up in Prague.

The firm will check affordability using social media accounts to analyse lifestyle habits while customer invoices will be accepted as proof of income

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Why am I not surprised by these numbers although I bet the FCA will be! particularly as these type of borrowers don’t exist in their eyes or if they do their treated as leapers. Yet more unintended consequences rearing their heads.

    • So David, you don’t think that borrowers actually being able to pay back their loans is important? I know the old school building society model is seriously boring, but it’s goal was that the lender gets his money back, with interest, and the borrower gets a house they end up owning. A really radical concept, I’m sure you’ll agree.

  2. Let’s think about this. The country this organisation has alledgly set up in is in the EU.Thus the MMR will apply. So the lender won’t be able to conduct business in the manner described. Add to this that for a UK based consumer these will be foreign currency mortgages with currency risk and unknown regulation and redress scheme and it really is a non starter. Still, a good story that gave us all a laugh yesterday.

  3. For me, this really is a curates egg.
    The FCA were flat out wrong with their usual knee-jerk reaction of shutting down the self-cert market.
    On the other hand, If I were a borrower, I would be mightily concerned to check the T&Cs from this lender before taking any of their money.

    Time will tell

  4. Isn’t strange how normally sane people become emotive about the tags that are used within financial services?

    What is self-certification? A method by which lenders have chosen to target a group perceived as low risk due to having a sizeable amount of equity/deposit and having passed a credit scoring system. The lender understands that in todays world certain types of income are routinely ignored by lenders.

    a) Often only half bonus/commission used
    b) Self employed often have their historic income averaged over two or three years
    c) Child benefit, disability living allowance is often ignored
    d) car allowance is often ignored
    e) non-court-ordered maintenance is generally ignored
    f) rental income is often ignored if a mortgage is present

    None of the above pass the common sense test yet are in general use.

    Self-certification enables these forms of income to be used to the advantage of the consumer. Those misguided individuals who term self-cert as ‘liars loans’ completely miss the point.

    More pointedly, if a lender chooses to take a commercial advantage by introducing self-certification then who is the PRA/FCA to stop the? Every time I moan to the FCA about dubious lender practice I am hit with the response that it is commercial judgement. Well, so is this.

  5. Here here – at last someone commercial good on yer Graeme – why is anybody shocked by this statistic ?

    Reminds me of when lender shook the market up in the 80’s and stole 75% !!

    MMR has been a catastrophic mess for 30% of the market that have become mortgage prisoners it is hardly surprising that home ownership has fallen more in the last few years than at any time in the previous 20.

    Lets not forget that a lack of proper commercial judgement(caused by interference from regulators) together with that old ‘ticking time-bomb’ interest only (complete and utter nonsense) will doubtless put good blameless homeowners on the street and at the mercy of the rental sector (particularly in low equity areas) guess who will pick the tab up for that ? you got it the us/state !!

    Unintended consequences from pointless regulation

    • Agreed Derek,

      The market is much more powerful than these fools who try to corral the risks of life.

      Simple distillation of contract law is all that is needed “do all you will say you will do” We have the rule of law and a court system to enforce that and more importantly a society which preaches and rewards personal responsibility, oh and READ THE (YOUR CHOICE OF FRUITY WORD) CONTRACT.

      The neutering of Caveat Emptor from all walks of life and the proliferation of petty regulation are the worst acts perpetrated on society by those we elect (and those doing their bidding) dumbing down the population to mindless easily herded sheep, but as some may say maybe that was the plan all along.

  6. I can see both the potential for misuse and the benefits they can bring for certain individuals – between the banks over conservative nature, and the regulators tendency to legislate to the most common borrower type and ignore more unusual scenarios, there is certainly a gap for those with, unusual or multiple income streams, however these numbers do worry me somewhat – the numbers quoted seem far higher than would be expected from those who actually NEED a loan using this type of risk analysis.

    Regulation and redress are of course valid points, but i suspect will be much lower down the client’s pecking order of importance, than actually being able to buy their own home, so i doubt those will be a limiter on appetite.

    Currency denomination is largely immaterial – it is perfectly possible to get a sterling denominated mortgage in the eurozone, just as it is possible to get a euro-denominated mortgage here.

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