| Self certification remortgages and remortgages have | | | | remortgage applicant lied about their profit and |
| been around for a long time. The self certification of | | | | augmented it way above what they in fact did earn. |
| income for self employed remortgages and | | | | Self certifications lead to people being unable to meet |
| mortgages applicants was very common and also | | | | their mortgage payments and some fell into mortgage |
| very popular. Self cert. income means that no official | | | | arrears and suffered from the repossession of their |
| proof of income is required and that the mortgage | | | | property as a result. Since the start of the credit |
| applicant simply declares what he earns. The self | | | | crunch most mortgage lenders of their own volition |
| employed stated their own income on a letter head. | | | | have abolished self certification of income without any |
| Many self employed applicants such as tradesmen are | | | | legislation advising them or in fact ordering them to do |
| paid in cash by the private individuals whose homes | | | | so. Although a couple of mortgage lenders are still |
| they decorate, whose kitchens they fit, etc. | | | | accepting self declarations of income they now often |
| Other trades such as hairdessers frequently receive | | | | ask for additional further official verification of earnings. |
| cash in hand for their work. They should all of course | | | | The FSA desire the complete abolitiion of self certs. |
| have been honest and declared all these cash | | | | and the mortgage lenders must comment on this by |
| payments to the Inland Revenue, but human nature | | | | the end of January 2010. |
| being what it is this was frequently not what happened. | | | | Before the credit crunch the FSA truly believed that |
| Some of these individuals were actually earning the | | | | the mortgage industry would regulate itself in a decent |
| income that they claimed they were on their self | | | | and honest way. This did not happen and it was the |
| declarations, but being a little dishonest simply could not | | | | rash lending of these very lenders which precipitated |
| prove it officially. For these self employed self certs | | | | the credit crisis To profit themselves and to receive big |
| were alright when applying for mortgages and | | | | bonuses many financial fat cats cared nothing about |
| remortgages as they had the earning capacity to | | | | whether those borrowing mortgages and remortgages |
| support the repayments to the remortgage or | | | | from them could afford the repayments. Before long |
| mortgage. | | | | this self certification will stop for good. |
| The problem arose was when the mortgage and | | | | |