First Time Buy - Mortgage help

meanmachine_2

I do think sometimes the brokers on this site are living in cloud cuckoo land.

I'm sure they never break the law, but from my experience, currently the only FTBers getting mortgages (my mates) are all taking out self-certs, even though they're employed.

Why? Well work it out for yourself.

Think about it, for crying out loud. House prices are now NINE TIMES the average wage.

How do you think FTBers are affording this?!!!

The FSA claim there isn't a problem. Well simply maths and logic tell me otherwise.

AndrewSmith

Fair comment MeanMachine and well put speaking, as you say, from your own experience.

I am also speaking from my own experience (12 years in the industry arranging on average 8 new mortgages a week) I can honestly say that I have only ever had probably 4 first time buyers use a self certify mortgage. 1 was paid commission only, the other 3 were, I believe, self employed for less that 3 years and had no accounts.

What I state in my previous posts are based on my experience and fact.

There may well be brokers out there that are prepared to falsify figures to obtain that extra mortgage that month or, as you say, market forces in their area dictate that FTB's cannot afford to purchase.

I have a record of 12 years without complaint or dissatisfaction from clients and have a clean compliance record from my annual audits.

Following the new FSA rules I, for one, am certainly not about to jeapordise my business, future career and livelyhood leaving myself open to prosecution for the sake of a 0.5% procuration fee. The example I give in my previous post about an ex collegue is completely factual and was shown on Watchdog. It really happens.

Just because some brokers will do this, and I wholeheartedly accept that some do, doesn't mean we all will. I am definately not in "cloud cuckoo land" and am fully aware of how the system is being abused. Just because I completely disagree with it does not surely put me in "Cloud Cuckoo Land"?

Andy

herbiesjp

@ Meanmachine

Are you saying your mates don't earn enough? Are they getting self certs fraudulently?

If so then blow the whistle on them and the brokers/lenders allowing this to happen.

There are way for FTBs to get mortgages agreed with low incomes - just need to know how lenders work

AndrewSmith

Here here @ Herbie

Blindly self certing a FTB without proper research is a short cut taken by inexperienced incompetent Brokers. It will catch up with them eventually as I know that whenever I submit a self certify case the compliance company I use ask me to provide evidence and justification in writing to the n'th degree to prove it is appropriate. This includes confirmation from the I.R that the person is self employed, or if they are saying they are employed on commission only or high bonus' then a copy of their employment contract to prove this.

In today's claim culture it just is not worth doing anything that can come back at you later down the line.

Eg: you recommend that someone self certs as he clearly has insufficient income, he overstates his income, 12 months later gets repossessed as he has been made redundant, but couldnt take out the correct payment protection along with his mortgage as he stated he was self employed to get it. Who gets the law suit? Won't be the lender, it will be the Broker.

No win No fee springs to mind !!!

stanmoresaver

Well said!

As a broker, most of us know the "tricks" but it depends how desperate some brokers are for business. Like AS above, I am in this business for the long term and won't let my business be jeopodised by a single deal.

As an aside, i personally feel employed Self-Cert is plain and simply fraud, both by the lenders (and it is they that will make the most money from a deal!) who accept it, and the brokers who use it. If you are employed, you have an employment contract and therefore have a proveable income, however it is derived. On this basis, I've even had a lenders rep suggest that employed people who score well don't go self cert but put the income needed to apply as they only will check one in eight!!!!

:wall:

(I hadn't read the two posts above before posting this)

meanmachine_2

Andy, pleased you're keep your nose clean, but from my much more limited experience (i'm early 30s with friends who have self-certed), there are brokers out there more than happy to make incomes stretch to breaking point.

Isn't that why this thread exists in the first place?!!

And no, I'm not going to blow the whistle. These people have brains, they know what they're doing. If int rates rise, they'll be punished by losing their homes.

AndrewSmith

It will be interesting to see where the claim for mis-sale goes once the endowment bandwagon has stopped.

A friend of mine who is a barrister reakons it will start to focus on mis-sold self cert mortgages once again. They began to a few years ago but the endowment crisis stopped it before it gathered momentum.

@ Meanmachine - Thanks for a brilliant debate. It really is useful to see it from the other side of the desk, so to speak, I will certainly take on board the comments you make.

Andy

herbiesjp

meanmachine wrote:

And no, I'm not going to blow the whistle. These people have brains, they know what they're doing. If int rates rise, they'll be punished by losing their homes.

Just trying to provoke some further debate here, as it is interesting to see what others feel.

@Meanmachine - by doing nothing are you not as culpable as those commiting the action? I'm not worried if interest rates go up and they get unstuck, I'm more worried by the fact that it is fraud.

If you saw a robbery, would you not tell the police?

If you do not help to shut the down the operators that misuse this method of obtaining a mortgage, then one really cannot complain if one believes this is the reason house prices are going up.

The advisers on here know full well that if they suspect something untoward about an application, they have to report it internally. If they do nothing, and a court says the adviser should have suspected something (NOT that knew but said nothing) but they should have known something was wrong - the adviser can end up in prison (money laundering rules)

stanmoresaver

herbiesjp wrote:

The advisers on here know full well that if they suspect something untoward about an application, they have to report it internally. If they do nothing, and a court says the adviser should have suspected something (NOT that knew but said nothing) but they should have known something was wrong - the adviser can end up in prison (money laundering rules)

Sorry to hijack this post and turn it into debate amongst brokers but who else considers the fraudulant activity of overstating an income to obtain a mortgage a breach of Anti money laundering rules??

herbiesjp

stanmoresaver wrote:

Sorry to hijack this post and turn it into debate amongst brokers but who else considers the fraudulant activity of overstating an income to obtain a mortgage a breach of Anti money laundering rules??

I did say I wanted to get more debate here. lol

You tell me what a money launderer looks like, and tell me you can spot one then you are better than me.

If someone is overstating their income then there is already criminal intent there - why they are overstating their income and the purpose, would be for the authorities to conclude.

What I'm trying to get at here, is that as advisers we have so many rules and regulation we don't know where to turn for risk of bumping into another one. If we turned a blind eye, we could get sent to prsion (wosrt case scenario)

Here we have a poster that knows of cases where things are not 100% right, but says will do nothing about it.

What do others think?