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Law firm Clarke Willmott’s Freedom of Information Act request says the FSA conducted a desk-based review of self-certification last year after a full-on investigation. Should the FSA take it upon itself to investigate more thoroughly now that self-cert has come under its regulatory umbrella?

Yousefi: I am not sure this is necessary at this stage as a large number of lenders are active in self-cert as well as the so-called fast-track arena. The lenders undertake detailed electronic checks on the credit-worthiness of the borrower as well as making sure the credit bureau data for each applicant is totally clean before deciding to lend. Moreover, a large proportion of self-cert business is to the self-employed who, for a variety of reasons, do not have up-to-date accounts but the vast majority possess excellent credit histories as they are successful businesses. They appreciate that the essential secret of their financial success is being fully committed to managing their finances effectively, such as making payments on mortgages and business loans on time and every time. But there is a need for an annual review by the regulator in this market as there is a risk of increased arrears and bad debt at times of economic difficulties.

Montlake: The whole question of self-certification is a very emotive one. In the main, since regulation, lenders have taken the steps required to ensure income disclosure is not the issue it may have been in the past. Many have tailored the products with more specific questioning or introduced a more sensible affordability calculation. The leading broker firms, certainly the ones I am aware of in London, have also taken steps to ensure that self-certification is not misused in a fraudulent manner. Of course, there will always be some brokers who are happy to bend the rules but the days of a road sweeper earning 70,000 seems happily to be long gone. I do not feel there is therefore a need for a more thorough investigation as, on the whole, the industry has worked hard to get this particular house in order.

Batchelor: There are a number of areas that the FSA will no doubt look into more closely, such as lifetime mortgages and interest-only loans, not just self-certification. With mortgage regulation nearly 10 months old, the FSA now has much more experience of the industry and has taken time to visit many companies to understand the complexities of the market. Therefore, any investigations carried out should be better informed. We strongly believe self-certification has an important place in today’s market and offers choice to borrowers who a few years ago had none, as long as all the parties involved act responsibly.

Could the appointment of Chris Cummings to the role of director-general of AIFA diminish his role at the Association of Mortgage Intermediaries?

Yousefi: Chris Cummings is an excellent ambassador for the intermediary mortgage market and is fully in tune with the needs of both the mortgage brokers and institutions such as the FSA, the CML and the wider UK financial services industry. He is probably one of the few people who is equally suited to steer AIFA and the Association of Mortgage Intermediaries more

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