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Lenders tighten up on self-cert

Three more lenders have changed their self-cert criteria as the fallout continues from the controversy over the sector last year.

West Bromwich Building Society withdraw its self-cert facility for loan over £250,000 last year, becoming the first high-street lender to take action after a BBC TV programme claimed that borrowers were being encouraged to falsify salary levels.

The society now requires employed applicants for a self-cert mortgage to produce either their latest pay slip, their latest bank statement showing the salary credit or their P60 for the previous tax year.

Brokers say there are contradictions in this move but the Co-operative Bank has amended its criteria in a similar fashion. It will now only accept self-cert from an employed applicant if the income is from a number of sources and the amount claimed as income can be supported by the latest P60.

Northern Rock made changes to its criteria before Christmas and no longer offers self-cert to first-time buyers and limits self-cert borrowers to 80 per cent loan to value for loans above £500,000.

Hamptons International Mortgages associate director Jonathan Cornell says: “I think if a lender wants to pull out of self-cert for the employed, it should just come out and say so – asking for one proof of income does not look like self-cert to me. With predictions for steady house price growth this year, lenders which do not permit self-cert for the employed will see drops in their business.”

West Bromwich Building Society assistant general manager credit and risk Richard Early says: “We have always carried out a reasonableness check for self-certification and this is just taking it a bit further – it is not a huge hassle for an employed person to produce a wage slip to confirm within reason that their salary is not overstated.”

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