"non-verified loans made up 43% of all home loans granted in first 3 months of 2010"

Really2

blueboy43 wrote: »

The fact that close to 20% of mortgages with less than 10% deposit had no income verification in 2007 is staggering.

It is when you think that could be 100%+ also.:eek:

blueboy43

Thrugelmir wrote: »

Thanks for digging the report up.

As ususual the media has more than likely ramped up on a single fact. Without investigating and comparing like for like. The mortgage market has changed significantly since 2007. The demised lenders account for the worst lending culprits.

In the FSA report it says



As mortgages for the self employed are difficult to come by. I assume this to refer to the lack of obtaining evidence of income from those in employment. Easy enough to have some payslips made up. In days gone by lenders would write to employers for confirmation of salary and employment terms etc.

Self certification today isn't what is was a few years back.

It's encouraging that they are not being prescriptive. If I was a lender I would place more emphasis on 3-12 months bank statements than anything else. An hours scan should give a good idea about income, potential affordabilty & undisclosed loan or credit card balances.

Graham_Devon

Really2 wrote: »

You are not reading carol. You are quoting the CML not me, I agree with the FSA which is nearly half of mortgages from 2007-2010.

Although you can't see me, apparently, it was YOU who added to Carol's quote. Carol never mentioned the CML. You did by adding it to carol's quote in red, then have gone off on one at her for quoting something you added?!

This place gets more and more bizzare.

All the arguing because someone thinks it's a misquote, when infact, it's not anyway.

Really2

http://www.bbc.co.uk/news/business-11390764

Mortgage plan will force house prices down, CML warns
"This is just one of a number of unintended consequences of the FSA's well-meaning but misguided proposals that the CML believes the UK's existing 11 million mortgage borrowers have every right to be concerned about," said the CML's director general Michael Coogan.
'Significant falls'
Mr Coogan was citing a footnote in the FSA's consultation document, which was published in July.

This said that economic modelling of the consequences of its proposals "did project significant falls in house prices from the reduction in lending".

"In addition, the impact of a drop in lending on house prices was also modelled using the Oxford Economic Forecasting model, another model of the global macroeconomy," the FSA document said.

"This gave similar house price impacts to those from [the National Institute of Economic and Social Research]", the document added.

Debt

The FSA is worried that despite the banking crisis and economic downturn, and the current severe rationing of mortgages, too many people are still being given home loans even though they cannot show that they can afford them.

In July it pointed out that so-called non-verified loans still made up 43% of all home loans granted in the first three months of 2010.

The regulator argued that this practice exposed the borrowers to debt in their eagerness to buy a home.

Thrugelmir

blueboy43 wrote: »

It's encouraging that they are not being prescriptive. If I was a lender I would place more emphasis on 3-12 months bank statements than anything else. An hours scan should give a good idea about income, potential affordabilty & undisclosed loan or credit card balances.

Also clever PR by the CML. As they can argue that the lower lending they are making is due to tighter affordability rules. When in reality they are content to lend less to individual borrowers anyway.

FTBFun

What exactly is a verified loan btw? I had to provide 3 months of payslips but that was about it. As far as I'm aware they didn't contact my employer to confirm anything.

Really2

Thrugelmir wrote: »

Also clever PR by the CML. As they can argue that the lower lending they are making is due to tighter affordability rules. When in reality they are content to lend less to individual borrowers anyway.

Spot on, just that I called it a Jedi mind trick.

Thrugelmir

FTBFun wrote: »

What exactly is a verified loan btw? I had to provide 3 months of payslips but that was about it. As far as I'm aware they didn't contact my employer to confirm anything.

You've answered your own question.

Lenders would be required to satisfy themselves as to the declared income of the mortgage applicant by obtaining 3rd party confirmation.

payless

Thanks for all of those who mocked by post about broker verified income.

To provide an example for those who may not understand the process:

My most recent case ( 85% ltv) - I visited clients, took copies of 3 months payslips and P60's , backed by lastest bank statement showing credits. I obtained these as I would have expected the lender to request, but also on my file for any compliance/FSA audit.

On placing the application the lender credit scored application and decided not to request the proof.

Therefore the case would have been included in the non-verified figures reported to regulators.

Yes some could abuse the system, but thats to say all do.