Friday, September 2, 2011

Nail in the coffin of self-cert

Taxman to cross-check mortgage claims

Seems like a big one to me. Nice to see HMRC getting paid for something worthwhile too :D Do you think this will affect those coming to end of terms and looking to remortgage as well?

Posted by chubba @ 11:07 AM (3213 views)
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21 thoughts on “Nail in the coffin of self-cert

  • wow….checking applicants are telling the truth…thats a new one….what a great idea.

    had they done this during the housing boom,then we wouldn’t have had 50% of mortgages between 2005 and 2007 as self cert.

    Then we probably wouldn’t be in the mess we are in now

    My experience is that banks always checked rigourously….this seems to have disappeared from new labour onwards

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  • Such a good idea. If there is a serious mismatch between declared earnings and real earnings then the house buyer should also get a bad mark on his/her credit record for being a fibber.

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  • I don’t know the current stats for the IR making wrong assumptions, not accepting that they have made a mistake, not answering their phones, not dealing with letters in a timely manner.

    I pity anyone who gets caught up in this – their stress levels will go through the roof.

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  • I don’t believe it will be in a banks interest to check with the Inland Revenue for long, because we have proven that they can get away with reckless lending. If the borrower crusifies themselves to repay fantastic, if they default they will get bailed out by the taxpayer fantastic. Why check with the IR in the long term and let them spoil the party? I agree banks are being careful at the moment, but I think they will be lending like maniacs again within 20 years.

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  • I don’t believe it will be in a banks interest to check with the Inland Revenue for long, because we have proven that they can get away with reckless lending. If the borrower crusifies themselves to repay fantastic, if they default they will get bailed out by the taxpayer fantastic. Why check with the IR in the long term and let them spoil the party? I agree banks are being careful at the moment, but I think they will be lending like maniacs again within 20 years.

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  • I don’t believe it will be in a banks interest to check with the Inland Revenue for long, because we have proven that they can get away with reckless lending. If the borrower crusifies themselves to repay fantastic, if they default they will get bailed out by the taxpayer fantastic. Why check with the IR in the long term and let them spoil the party? I agree banks are being careful at the moment, but I think they will be lending like maniacs again within 20 years.

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  • @Jallan…

    I’ve mentioned this on previous posts but a friend of mine has recently been caught out by this (even though it was still only a pilot scheme at the time).

    Not only was his mortgage application turned down but he ended up with a huge tax bill as his tax return showed (significantly) lower earnings.

    Whilst you may be right in the long term, I believe once stories like these get around, people will be too scared to lie anymore regardless of whether the banks continue checking, for at least a good few years anyway.

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  • HMRC are a bureaucratic nightmare… they screw up income tax, family credit, VAT returns… are we to expect that mortgage background checks will not enter a similar blackhole. There is a need for checks to be made, and an end to self-cert… but that should be carried out by the lender – it is their risk after all…. unfortunately the lender is often to keen to lend and therefore turns a blind eye.

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  • As hash b points out we’ve already had 2 threads running earlier this week on this subject – it will mainly hit self employed – much more difficult for someone on PAYE to overstate income (the lenders have long since picked up on the false payslip/P60 scam). Another move that pricks the bubble.

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  • Is that a horse I see running down the lane?

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  • Don’t see this changing much, except the most egregious lies told by self certers and their mortgage advisors. Lenders can still subjectivey determine “affordbility” on any number of massively flexible measures and lend as they see fit accordingly.

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  • Why is this not mandatory with every mortgage application?

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  • @Clockslinger – the lenders in my experience have moved almost 180 degrees from the pre-August 2007 days – they are turning down valid mortgage applications for trivial reasons – it goes quite along way to explain why I have a lot less hair these days with most of it having been torn out in frustration !

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  • Yes, yes, yes!

    Opps, wrong site.

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  • the taxman can’t even cross-check company addresses for corporation tax against companies house addresses, let alone identify individuals that own multiple properties via the land registry. so this is way ahead of their capabilities, big time ahead – except on a one-off basis

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  • @10. will: No it’s a CPRE picket trying to stop the yellow bulldozer next to him from entering that field…

    Wait, I can pick up a bit of conversation: “Come off it Mr Dent. You can’t lie in front of this bulldozer all day…”

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  • Don’t expect this to change much.

    If they start to find too many cases of blatant lying, they will probably drop the whole investigation to avoid political embarrassment!

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  • Any banks found to have not conducted due diligence before lending out money – ie making proper checks on the creditworthiness and ability to pay of their creditors – ought to be able to be sued by shareholders who have lost substantially through their recklessness.
    Looking at another thread, it seems the Americans are leading the way when it comes to litigation over alleged corrupt practices within the bank industry – and I suspect there’ll be a lot more legal action yet, plus, of course, a lot of settlements outside court where no liability is publicly admitted.
    It’s about time some of these senior bankers faced criminal charges, though, in this country, I very much doubt that will happen.
    As for imposing tougher regulations and ring-fencing the ordinary high street banking activities of the major banks operating in the UK, it’s no wonder the Tories are dragging their heels when the party is largely financed by these institutions and their offshoots. Surely, given the Tory Party’s vested interest in maintaining the status quo for the banker, en bloc they should banned from voting on any proposals for tightening regulations.
    Seems to me, the Tories are as corrupt as their paymasters.

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  • So now our information is openly for sale to the banks? Beats putting it on CD and leaving it on a train I suppose…

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  • Given the consistent flagrant tax avoidance of the banks, what obliges HMRC to be open with them pray?

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  • it_is_going_with_a_bang says:

    All they are providing is a history of Tax Returns which will be computer based and will work absolutely fine.
    I can’t see why many errors should occur – after all the indivdual works out and submits the tax return in the first place.
    This is will just serve to prevent the fake production of payslips and tax returns.

    I can’t quite believe that they have had to wait until 2011 to decide on implementing something that could have easily been done 15 years ago.

    You would have thought preventing out right fraud on applications would have been a priority long ago. The fact that it has not been just goes to show the mentality of the banks when lending. Forget the Tory vs Labour debate. Both of them have been completely happy to let things go along as they were.

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