Self-Certification Mortgages
I heard Self-Cert Mortgages Are Being Banned In This Country. Can You Clarify?
Mid October 2009 the FSA ( Financial Services Authority - the UK’s financial industry regulator ) proposed outlawing self-certification mortgages as they had reason to believe a high number of home foreclosures and residential repossessions resulted out of abuse of this financial instrument. To be fair there has been no official evidence or statistic to confirm that there are more repossessions or foreclosures in sector of the mortgage market than in any other sector. However the ‘perceived’ risk they are linked to is reason alone for lenders to attach a risk premium to them making them slightly more expensive but still competitive. While they are still around now for the time being (at the time of this writing) as the final verdict has not been decided most experts believe they are here to stay and should they do end up being banned completely that they will be re-introduced into the market at a later point , most probably when the UK makes a full recovery from the global credit crunch . This is believed to be because self-cert mortgages actually account for a significant proportion of property transactions and is what is required to sustain a healthy rising property market.
