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One In Three Mortgages Still Liar Loans In Q3 2010

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A speech by the FSA's Mortgage Policy Manager last October:

Self-certification mortgages have been more or less withdrawn from the market by lenders, following the credit crunch. But non-income verified mortgages continue in the form of ‘fast track’. Even in Q1 this year, this accounted for 43% of mortgages sold.

So what’s wrong with fast-track? We are well aware that lenders’ fast-tracking processes can be ‘gamed’ by brokers who know the rules and who know where to place cases where they don’t want to provide evidence of income. And with the demise of self-cert, the point of least resistance becomes fast-track. Fast track would simply develop into self-cert by another name. We read the mortgage blogs and have seen many brokers comment on how easy and open to abuse the fast track process is.

http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2010/1020_lb.shtml

After reading the speech I contacted the FSA to ask what percentage of mortgages were non-income verified in other quarters of 2010. I've now got a reply:

Q1 2010: 43%

Q2 2010: 37%

Q3 2010: 32%

The percentage is dropping but still 1 in 3 mortgages are potentially liar loans. A decent credit score and people can lie about their income.

The HPC anti-christ's take on fast-track mortgages

http://www.videojug.com/expertanswer/other-types-of-mortgages/whats-a-fast-track-mortgage

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A speech by the FSA's Mortgage Policy Manager last October:

After reading the speech I contacted the FSA to ask what percentage of mortgages were non-income verified in other quarters of 2010. I've now got a reply:

Q1 2010: 43%

Q2 2010: 37%

Q3 2010: 32%

The percentage is dropping but still 1 in 3 mortgages are potentially liar loans. A decent credit score and people can lie about their income.

Given that mortgage approvals haven't breached 50,000 per month, all year, according to BoE stats (see http://www.housepricecrash.co.uk/graphs-mortgage-approvals.php), then these figures are staggering. Raises a lot of suspicion.

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My mortgage in 2006 (yes, I know) was non-income verified but it wasn't a liar loan.

I can think of a number of reasons why this might be the case.

Can't you?

Do you think the number of legitimate reasons means that 1/3 of the mortgages granted require a non-income verified mortgage?

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My mortgage in 2006 (yes, I know) was non-income verified but it wasn't a liar loan.

I can think of a number of reasons why this might be the case.

Can't you?

I can't think of anything legal.

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A speech by the FSA's Mortgage Policy Manager last October:

After reading the speech I contacted the FSA to ask what percentage of mortgages were non-income verified in other quarters of 2010. I've now got a reply:

Q1 2010: 43%

Q2 2010: 37%

Q3 2010: 32%

The percentage is dropping but still 1 in 3 mortgages are potentially liar loans. A decent credit score and people can lie about their income.

The HPC anti-christ's take on fast-track mortgages

http://www.videojug.com/expertanswer/other-types-of-mortgages/whats-a-fast-track-mortgage

Look at that perfect 5% drop between quarters. The addict is clearly on a managed withdrawal program to rid them of their problem.

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Right so about a third of approvals aren't having their earnings check, is one of the reasons that the banks are expecting a crash and hence more worried that they don't get dumped the negative equity. So they are checking every single deposit and accepting that they have improved their earnings checks over how they used to operate. Just looks like they have accepted a big drop in the market is around the corner. ;)

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These were the actual figures they sent me:

To answer the specific question you have raised on the percentages of non-verified mortgages so far in 2010, the figures are:

Including lifetime mortgages:

Q1 2010: 42.60%

Q2 2010: 37.38%

Q3 2010: 32.44%

Excluding lifetime mortgages:

Q1 2010: 41.24%

Q2 2010: 36.08%

Q3 2010: 31.05%

I presume "Lifetime mortgages" are like equity release?

A lifetime mortgage is a loan secured against your home. There are no regular repayments to make and the loan and interest are rolled up and usually repaid when you die or go into long-term care.

What are the benefits?

You receive a cash lump sum to spend on whatever you want

You don't have to make any monthly repayments during the lifetime of the loan, as the loan and interest are rolled up and repaid by the sale of your property when the plan ends. This is normally when you die, or move into long-term care.

Aviva’s 'no negative equity' guarantee means neither you nor your estate will have to pay back more than your home is sold for, as long as this is for the best price possible

What are the considerations?

A lifetime mortgage charges interest on the total amount of the loan including the interest that has already accumulated, so the amount owed will quickly increase

A lifetime mortgage is a long-term commitment – it can be expensive if you decide to repay the loan early and you may have to pay a substantial early repayment charge.

http://www.telegraph.co.uk/sponsored/offers/aviva-equity-release/7800240/Lifetime-mortgage-explained.html

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Didnt even realise they still did this. All self cert offers have long since dissapeared from price/mortgage comparison sites.

Is this a wink wink hush hush thing they actually do in the banks branches?

Seriously, i thought for the last 2 years these things had gone.

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Didnt even realise they still did this. All self cert offers have long since dissapeared from price/mortgage comparison sites.

Is this a wink wink hush hush thing they actually do in the banks branches?

Seriously, i thought for the last 2 years these things had gone.

...'liar loans' also include those salaried people who submit false payslips ....while the self employed have to produce say three years of past certified accounts and projected budget's which is all good and well as long as the documentation is not forged and fraudulent ...who checks...?..... <_<

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...'liar loans' also include those salaried people who submit false payslips ....while the self employed have to produce say three years of past certified accounts and projected budget's which is all good and well as long as the documentation is not forged and fraudulent ...who checks...?..... <_<

The tax man should. They should just haul in EVERY self cert borrower.

If things dont match up either theyre guilty of tax evasion or mortgage fraud, one of the two. Bit of a catch 22 for the borrower. No way out.

Maybe offer them a way out if a group of them testify that a mortgage broker basically misled them to lie, as shown on one of Eric Prebbles videos.

The prison system would be bursting at the seams with bankers, brokers and IFAs by now if i had my way.

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The tax man should. They should just haul in EVERY self cert borrower.

If things dont match up either theyre guilty of tax evasion or mortgage fraud, one of the two. Bit of a catch 22 for the borrower. No way out.

Maybe offer them a way out if a group of them testify that a mortgage broker basically misled them to lie, as shown on one of Eric Prebbles videos.

The prison system would be bursting at the seams with bankers, brokers and IFAs by now if i had my way.

....as pointed out it's not just certain self certs ...what about those with fraudulent salary slips which they can 'buy' off the internet ....?..... <_<

Edited by South Lorne

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My mortgage in 2006 (yes, I know) was non-income verified but it wasn't a liar loan.

I can think of a number of reasons why this might be the case.

Can't you?

Frankly - no. There must be ways of verifying that mortgage holders have a fighting chance of actually repaying the mortgage.

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Why are the Cartel of Mortgage Liars allowed to refuse to provide data to the regulator?

Why doesn't Turner simply suspend their licences until they do?

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Why are the Cartel of Mortgage Liars allowed to refuse to provide data to the regulator?

Why doesn't Turner simply suspend their licences until they do?

Because no one should admit there's an elephant in the room....

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