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Yorkshire chief warns on self-cert dangers

Yorkshire Building Society chief executive Iain Cornish is warning that self-cert could be the next misselling scandal and is asking the FSA to address this issue.

Speaking at the presentation of the society&#39s annual results on Monday, Cornish revealed his concerns about self-cert, saying the industry is deluding itself if it believes there is no problem.

Unlike many of his peers, Cornish thinks it is the lenders who are driving any abuse of self-cert by advertising the fact that they make no income checks on their products.

He questioned the FSA&#39s move to allow self-cert for the employed, asking why there would be objections to income verification when this is easy to obtain, and is calling for the FSA to return to more prescriptive regulation on the issue.

Cornish also believes the industry should be more straightforward about selfcert, saying if it is necessary to stretch income multiples then this should be done openly and lenders should explain what they are doing.

His comments come two weeks after the FSA said there is no problem with self-cert and a week after a BBC TV programme pointed the finger of blame at lenders.

Cornish said: “Self-certification lending arguably has all the makings of a future misselling episode and we very much hope that the FSA seeks to address this risk in the application of its rules on responsible lending.”

FSA spokeswoman Kate Bristowe says: “Our rules put in place specific requirements relating to responsible lending and to self-cert.”

•Perspective, p32

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