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The sharp end of self-cert

So Panorama strikes again, hitting out at what it claims is the slovenly or dishonest way in which self-cert is used to push through inappropriate loans.

The figures certainly make for an interesting debate. Panorama says that self-cert combined with fast track could be as much as 30 per cent of the mortgage market.

The FSA says the figure is 6 per cent while the MCCB concurs with suggestions that the programme represented a storm in a teacup, as do most providers.

So there you have it – shoddy television journalism strikes again.

But just when everyone thought it was safe to get their customers estimating their substantial incomes once again, the chief executive of Yorkshire Building Society Iain Cornish wades in to the argument to say that self-cert risks becoming the next misselling scandal. Maybe Panorama was barking up the right tree after all.

Clearly, the first programme, in particular, revealed that some brokers were pushing things too far and were in breach of the mortgage code. Now senior industry figures are very concerned. And the FSA&#39s response is intriguing. It points out that repossessions for the self-cert sector run roughly in line with the rest of the mortgage market.

A telling point in a stable market but is this a stable market? Surely, there is a potential risk, given the lack of affordability. At the very least, the self-cert temptation exists and those who want to inflate their incomes may be tempted to shop around to find a broker who will break the rules.

Panorama proved that, in some cases, sharp practice exists. The extent of the problem is up for debate but perhaps the FSA and the MCCB should suggest what level of sharp practice that they are prepared to tolerate.

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