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Fsa Responsible Lending Project Reports

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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.

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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.

Good stuff Crown --- Takes your breath away of course......... The FSA really have got not a clue......... And haven't for years.......

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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