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Fca Warns Against Self-Cert Mortgages From Overseas Lenders

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Borrowers will have no UK protection if things go wrong, cautions regulator, just days after launch of Selfcert.co.uk in Czech Republic

http://www.theguardian.com/money/2016/jan/27/fca-warning-self-cert-mortgage-overseas-lender

I don't understand their business model at all. Why would you lend at 2.5% at a relatively high LTV (85%) ? It makes no sense. I understand for a UK bank who can borrow for (almost) free, but this business surely has higher funding costs?

Possibilities that come to mind:

1) Recycling / washing of money from interesting (hah) sources ?

2) Borrowers sign up to 2.5% and the company changes the conditions 1 year down the road (e.g. West Bromwich) - bait and swtich ?

3) Initial promotion to gain news coverage exposure ?

Any ideas?

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What protection do the UK ones have ?

I think they meant that there is a formal complaint pathway in the UK if you want to claim mis-selling, etc. You are also protected if you pay administration fees up front and the company goes tits up.

Overseas, if you have a complaint or they scarper with your money, good luck suing them in a Cayman Islands court.

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To answer the OP.

I imagine the management of this company hope to use borrowed money to live a grand lifestyle for a few years. Ride the bubble. Then when it all goes 'pop' , walk away.

No personal liability.

They've seen an opportunity.

Anyone who takes a loan with these people deserves all they are going to get.

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Dunno where the greatest risk lies really, a foreign owned lender starting to repo UK 'hard working families who just wanted a home' . We know the UK political/media operation will ensure the heroes/villains are labeled in accordance with the usual patterns and little/no scrutiny of the basic judgement employed by people will be undertaken.

i feel sure whichever way this arrangements hits the buffers, the outcome will be a poor one for prudent folks.

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I just don't understand the motivation of the lender and/or their backers.

Why would you lend money at such a low interest rate at such a high LTV?

As an investor, I can get 2 point something on 10 year gilts. It doesn't stack up.

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Most likely one of the big banks testing the water via a subsidiary to escape UK regulation.

They certainly have their media fanfare and have grabbed the attention of property speculators.

Give it 2/3 years and we will be back into the madness of 2007, but lending being done by 'offshore' banks (owned by our banks)

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Most likely one of the big banks testing the water via a subsidiary to escape UK regulation.

They certainly have their media fanfare and have grabbed the attention of property speculators.

Give it 2/3 years and we will be back into the madness of 2007, but lending being done by 'offshore' banks (owned by our banks)

I would go with that one just because of the interest rate on offer at such a high LTV, they must have access to the same rates as the more established banks

But there again perhaps they are going to be scrutinising applications ? and have seen a genuine opertunity ?

Quick Loans To Bring Back Self Cert In January 2016

We are pleased to announce that as of January 2016 we will be at the forefront of bringing back Self Cert mortgages to the UK through our new sister site.

Self Cert mortgages are important vehicles for those who are Self Employed and want to get on the property ladder. Without them, those who went in to self employment have often found themselves unable to get a mortgage – we want to reverse that.

We believe that the products were unfairly blamed for the banking crisis, in reality they actually had little or nothing to do with the crash, on this side of the Atlantic anyway. Blatant fraud (often by brokers) and mortgage backed security swaps in which banks lost their common sense were the real reason that the banks crashed. We intend to avoid both of those major factors.

The majority of people on Self Cert mortgages did not default and are up to date on their repayments. We are confident that our own assessment process will reduce fraud as much as humanly possible and well within manageable levels.

Quick Loans Ltd has recently purchased the domain name SelfCert.co.uk – it is from this site we and our partners will slowly look towards proving the concept and viability of bringing back these products to the market on a larger scale. We expect interest to be high from day one, so much so that we don’t expect to meet demand on our own.

We will be in a position to release more details on this in the coming weeks with a launch date of mid January 2016.

Edited by long time lurking

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They've yet to lend any money at the rate advertised - it's just their advertised rate to generate enquiries.

I have my suspicions as to how the rate at which they will actually prepared to fund mortgages will compare to that advertised.......

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They've yet to lend any money at the rate advertised - it's just their advertised rate to generate enquiries.

I have my suspicions as to how the rate at which they will actually prepared to fund mortgages will compare to that advertised.......

Rather like most personal loans - "Your actual rates and repayments may differ and will be based on your personal circumstances, the loan amount and term."

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"Self-cert mortgages – dubbed “liar loans” – were aimed at self-employed workers who had trouble proving their income to lenders"


"The firm added that it did not lend within the M25 area as it was “concerned about possible bubbles in the London property market”. "

:lol::lol::lol:

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