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‘Fast-track would have developed into self-cert’

The FSA says fast-track mortgages would have become “self-cert by another name” if the process was retained under the mortgage market review.

The MMR proposals stipulate that proof of income will be required on all mortgages, effectively banning self-cert and fast-track. Self-cert mortgages have largely been withdrawn from the market as lenders have tightened their affordability rules in the wake of the credit crunch, meaning that fast-track mortgages will be most affected by the MMR.

Speaking at the Building Societies Association annual mortgage seminar last week, FSA mortgage policy manager Lynda Blackwell said the regulator is right not to allow lenders to offer the service.

Blackwell said: “We are well aware that lenders’ fast-tracking processes can be ’gamed’ by brokers who know the rules and who know where to place cases when they do not want to provide evidence of income. With the demise of self-cert, the point of least resistance becomes fasttrack which would develop into self-cert by another name.”

Blackwell added that non-income-verified fast-track mortgages accounted for 43 per cent of all mortgages sold in the first quarter this year.


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