Monday, March 21, 2011
UK Currently Fails Most Tests
"One of the biggest contributors to the problems experienced in the mortgage industry during the financial crisis was the inadequate or lack of verification of borrowerâ€™s income and financial information.... In the UK, around half of all mortgage applications in 2007 and 2008 were processed without income verification.", "Currently in the UK, future house price appreciation can beconsidered in the evaluation of the borrowerâ€™s ability to repay the mortgage loan." "Reasonable debt service coverage -According to the Joint Forum, one of the most fundamental components of prudent underwriting relies on the borrowerâ€™s income to service the debt, taking into account all debt commitments." The UK FSA will propose closing the barn door now that the horse has bolted.