A friend of mine recently penned a column for a rival magazine in which he posited that common sense is returning to the mortgage world.
I sincerely hope he has spotted something I have missed because I continue to find nonsensical rules being applied rigidly and irritating pedantry being mandated with as much, or possibly more, regularity as ever.
Nationwide, which is better than most, recently requested a bank statement to prove that my client’s salary was being credited. Upon receipt, it phoned to advise that a certified copy was unacceptable as the statement only ran from the 3rd to the 31st of the month.
I pointed out that the salary credit on the 28th was quite obvious and visible but it seems some bright fellow has contrived a new rule that a bank statement is acceptable only if it covers the full month. A total waste of both my time and that of my client.
Similarly, at Santander they accept tax credit income and understandably insist on seeing the latest advice statement. However, they also insist on seeing every page of the statement even though the final two pages are always blank.
Consider also the short-sightedness of lenders which refuse to use PAYE income from a 20 per cent director if his company has made a loss. The same individual operating as a sole trader or within a partnership would not be mistreated in this way.
Off the record, lenders inform me that the MMR is the prime mover behind this introduction of nonsense and meaningless sophistry. In their attempts to be seen as whiter than white, lenders are happy to refuse 20 excellent cases as long as they avoid a bad one.
Back when the MMR was merely a gleam in a pedant’s eye, I attended an FSA roadshow which was intended to inform MMR policy.
I was seated at Canary Wharf among the great and the good and, with the rest of the attendees, commanded to advise what income proofs should be required of the self-employed.
After 10 minutes of the usual responses, I asked a different question: should there always be a need for proof? In fact, is there still a place for sensible self-certification of income?
This provoked astonish-ment from the FSA chap and, determined to show me my error, he projected a slide which, he explained, highlighted the massive dis-parity between standard lending arrears and those of self-cert.
His graphic revealed two lines – one relatively level and the other rising steadily. He stated that the latter showed self-certification arrears and felt that it adequately made his case.
I might have been a believer had the graphic not clearly stated that the rising line was “non-conforming”.
It seems he believed non-conforming to be synonymous with self-cert. Of course, I could be wrong, but the alternative theory of mendacity is far less appealing.
So, while I hope my friend is right and green shoots of reasonableness and logic are indeed bursting through, I fear that before things really get better, we are in for yet more rigidity of thought and unthinking obedience to pointless rules.
Alan Lakey is partner at Highclere Financial Services