The FSA says there is no evidence of mortgage application fraud among self-cert lenders.
Research from the regulator this week, based on information from 15 major lenders, finds that lenders “generally have adequate controls in place to protect themselves from becoming conduits for mortgage application fraud.”
It says genuine self-cert lending only accounts for around 6 per cent of all mortgage balances and that data for arrears does not show significantly higher rates for the sector.
Council of Mortgage Lenders spokesman Bernard Clarke says: “Fraud is not rife in the industry, as the BBC programme recently suggested. Lenders generally have the correct checks and balances to weed out application fraud. We welcome this review and its findings.”
FSA director of financial crime sector Philip Robinson says: “Our review did highlight recent growth in non-verified prime lending.”