FSA pans lenders over self-employed mortgage concerns

Simple Economics

This is a case of simple economics in my opinion. A low risk case can currently be 'fast-tracked' meaning that the small amount of time spent on it makes it a profitable business. Take away the power to 'fast-track' and the application process takes so long that the deal become unprofitable and the lender chooses not to do that type of business. The basic economics is something the FSA does not seem to be able to grasp. The FSA are forcing the lenders hands and then complain about the potential results! Perhaps the FSA chiefs should try running a business.

Posted by: Dan

Fast Track

Fast track is just a clever ploy by lenders to pass on the responsibility for proving income from underwriter's to brokers and IFA's, who they can blame later, if required. If the FSA insists that we can't take our client's word into consideration and must record documentry evidence of income, then Fast Track should be stopped as it is pointless. I think we should be able to offer advice from the information provided on the fact find that the whole advice process was based on, and if documentry evidence is required, it should be requested by the lender, who is after all taking the commercial risk. If clients lie to obtain a mortgage there should be no come back on the broker as it is they, that are using deception. Unless of course the broker knowingly assisted them.

Posted by: Mark Green

Dan for President

What Dan said is absolutely spot on. The FSA seems to have no interest in simple economics any more than they have the faintest interest in what is good for the borrower. Every single proposal that the FSA insist on, makes the mortgage more expensive for the eventual customer. I can't think of a SINGLE thing that the FSA has done that a customer would thank them for. Not one. And yet the billions that they pay themselves ..... think of the run-off period for those gold plated pensions too !!!!!!

Posted by: Trevor Passby

Lack of Understanding

The FSA place their focus on process, add to this their apparent dislike of flexibility or free-thinking and you have a regime where the ability of lenders to assess risk for themselves has disappeared. I pay my accountant to reduce my tax. He can reduce my profit through depreciation and other legal devices. In all probability a self-employed chap with a net profit of £30,000 is akin to an employed equivalent on £40,000. Lenders need to be allowed, even encouraged, to run their businesses in the whatever manner they consider prudent. Perhaps if ther FSA followed with respect to their vast expenditure we would all sleep easier.

Posted by: Alan Lakey