crown Posted August 5, 2008 Share Posted August 5, 2008 http://www.fsa.gov.uk/Pages/About/What/the...or_client.shtml The applicants self certified an income of £170,000 for a crafts and picture framing business. The firm took this at face value even though the customer had recently arranged an IVA (Individual Voluntary Arrangement) and bank statements on file showed an income from child and working tax credits. The income did not seem reasonable and no reason was recorded for the use of Self Certification. The firm made an offer without further questioning. The applicant self certified an income of exactly £100,000 net profit in each of the last three years working as a Financial Adviser. The file had a credit card bill showing only a £200 credit limit, and that the card was being used to make regular cash withdrawals. The customer was also applying for a sub prime mortgage due to previous County Court Judgements and current arrears. The income did not appear reasonable under the circumstances and no reason was recorded for the use of Self Certification. The firm made an offer without further questioning. http://www.fsa.gov.uk/Pages/About/What/the...poor_lend.shtml Remember this one is poor practice in lenders. Interest-only mortgages The policy did not mention how the cost of repayment plans were factored into the affordability check. The firm did not record the customer’s repayment strategies for any interest only mortgages. The firm therefore did not know how the customer intended to repay the capital. Appropriateness of self-certification and reasonableness of self-certified income The lending policy did not set out any criteria for determining whether self certification was appropriate for the customer from a TCF point of view. Instead, it simply listed the circumstances the product is aimed towards. The lending policy failed to outline what process was adopted for assessing the reasonableness of declared incomes. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted August 5, 2008 Share Posted August 5, 2008 if you allowed the FSA to even write down each move on the MB games produced electric memory game 'Simon' they would have still failed. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted August 5, 2008 Share Posted August 5, 2008 http://www.fsa.gov.uk/Pages/About/What/the...or_client.shtmlThe applicants self certified an income of £170,000 for a crafts and picture framing business. The firm took this at face value even though the customer had recently arranged an IVA (Individual Voluntary Arrangement) and bank statements on file showed an income from child and working tax credits. The income did not seem reasonable and no reason was recorded for the use of Self Certification. The firm made an offer without further questioning. The applicant self certified an income of exactly £100,000 net profit in each of the last three years working as a Financial Adviser. The file had a credit card bill showing only a £200 credit limit, and that the card was being used to make regular cash withdrawals. The customer was also applying for a sub prime mortgage due to previous County Court Judgements and current arrears. The income did not appear reasonable under the circumstances and no reason was recorded for the use of Self Certification. The firm made an offer without further questioning. http://www.fsa.gov.uk/Pages/About/What/the...poor_lend.shtml Remember this one is poor practice in lenders. Interest-only mortgages The policy did not mention how the cost of repayment plans were factored into the affordability check. The firm did not record the customer’s repayment strategies for any interest only mortgages. The firm therefore did not know how the customer intended to repay the capital. Appropriateness of self-certification and reasonableness of self-certified income The lending policy did not set out any criteria for determining whether self certification was appropriate for the customer from a TCF point of view. Instead, it simply listed the circumstances the product is aimed towards. The lending policy failed to outline what process was adopted for assessing the reasonableness of declared incomes. Good stuff Crown --- Takes your breath away of course......... The FSA really have got not a clue......... And haven't for years....... Quote Link to comment Share on other sites More sharing options...
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