The Council of Mortgage Lenders (CML) says it realises that mortgage lenders should join forces with mortgage brokers in order to improve the selling of self-certified mortgages.
This comes after the Financial Services Authority (FSA) announced that mortgage lenders have shown improvement in the operation of self-certified mortgages.
Self-certified mortgages allow potential borrowers that do not fit traditional mortgage lending criteria to qualify for mortgages. It is aimed specifically at people who are unable to prove their income.
The mortgage lenders' association said it was pleased with the FSA's conclusion, but that the risk of fraud and over-commitment still needs to be reduced.
"The FSA has recognised the lending industry's commitment to ensuring that self-certified mortgages are sold in a responsible way to those for whom they are appropriate," comments Michael Coogan, the director general of the CML.
"But we need to work with brokers to ensure that good practice becomes ever more widespread and to minimise the potential for misuse of self-certification."
The FSA's managing director of retail markets, Clive Briault, commented on the mystery shopper survey, saying that it expects mortgage lenders to "remain vigilant" in the light of pressures from competition, tighter margins and higher levels of mortgage arrears.
Mortgage lenders need to ensure that their systems and controls are reviewed regularly, Mr Briault urged.
CML: Mortgage lenders should work with brokers
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CML: Mortgage lenders should work with brokers
Tue, 15 Nov 2005
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