The Money Programme has recently blown the lid on mortgage lenders who have been encouraging borrowers to lie about their income on mortgage application forms.

It is now widely believed that many illegitimate self cert mortgages have managed their way onto the property ladder, which has lead to a rise in house prices and consumer spending.

It has been a question that many have been unable to answer – how can so many people afford to buy when property prices continue to rise? And now the answer is out and more astonishing than ever or predicted. Borrowers are lying about how much they earn, and lenders are letting them!

Unbelieveable, but true according to the money programme, and now one of the many reasons why homes up and down the country are being repossessed and just another example of the credit madness that has gripped the country and how we are all paying for it now.

The Money Programme went to several lenders up and down the country and found that many of them were encouraging borrowers to lie about their income so that they could offer them as much as 10 times their actual salary. This may seem like the lender is on your ‘side’ and is trying to help, but in actual fact all they are doing is causing more problems for you in the future, when you cannot afford to make your mortgage repayments.

Household debts now stand at 134% of income, which is a record figure. In addition, the number of personal bankruptcies has increased by 30% since last year; the most recorded.

Click n go Mortgages do not, by any means, endorse this kind of practice and encourage our mortgage applicants and help them to find the right mortgage. If you are looking for a self cert mortgage, then we can talk you through every aspect and make sure that the mortgage you chose is tailors for your situation and income.

A recent enquiry into the practices of a mortgage broker’s dealings of a self cert mortgage has lead to a £10,500 fine given by the FSA.

The Financial Services Authority found failures in the checks run on the income declarations made by customers when applying for a self cert mortgage. It has been suggested by the regulatory body that too much emphasis was placed on the information being supplied being 100% based in fact.

It is imperative that when applying for a self certification mortgage, that a full assessment is carried out examining the customers affordability for a particular mortgage.

In the case of this particular broker, false income declarations were made by customers, which had not been questioned. This has pointed out the fact that proper regulatory procedures were not in place to stop customers from committing mortgage fraud.

In addition to these charges, the FSA also found evidence that staff were not adequately trained and were charging customers extra fees for packagers to source products.

Although mortgage brokers do rely on their customers to be as honest as possible, thorough checks are carried out on the suitability of a person for a mortgage in line with the regulations laid out by the Financial Services Authority. It is also worth bearing in mind, that should you not be able to meet the repayments on your home, it could be repossessed.