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Banks drop employed self-cert

Royal Bank of Scotland and NatWest are pulling out of self-certification mortgages for the employed after controversy over the product.

A BBC TV programme claimed recently that some mortgage brokers encourage consumers to inflate their incomes when applying for self-cert mortgages.

The RBS move follows West Bromwich Building Society and Sun Bank making changes to their self-cert offerings. West Brom will no longer offer self-cert loans over £250,000. Portman Building Society subsidiary Sun Bank has by reducing the loan to value on its self-cert product from 85 per cent to 75 per cent for self-employed applicants and 70 per cent for employed applicants.

RBS is playing down claims that its withdrawal from the employed sector is a reaction to the BBC programme, saying it will continue to offer self-cert mortgages to the self-employed.

The Mortgage Code Compliance Board has made it clear that it does not believe self-cert is suitable for employed people and brokers have expressed concerns over offering self-cert mortgages to the employed.

London & Country mortgage specialist David Hollingworth agrees with RBS&#39s decision to withdraw from the market as he believes the product is high risk.

NatWest spokesman David Outhwaite says: “We are only ceasing to offer self-cert to the employed, we are not pulling it for the self-employed. This has always been primarily where we have received the most enquiries, we have seen very little from the employed. The product is there for those who cannot certify their income.”

Hollingworth says: “RBS is clearly wanting to state its good intentions by removing what it sees as a higher-risk product.”


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Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


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