Brokers ''encourage clients to lie''
Wed 26th Sep, 17:04:17 BST
Some mortgage brokers are encouraging those seeking to borrow money to lie about how much they earn in order to get a self-certification mortgage, according to a BBC investigation.
According to Radio 4''s File on 4, a number of brokers are advising clients who are on low incomes to inflate their salaries in order to make them appear to be less likely to default on the loan, resulting in buyers often signing up for loans they cannot afford to make repayments on.
One man reported he had been told by his broker that he should claim he earned £50,000 a year, despite his actual income standing at £25,000.
Lenders who issue self-certification mortgages often do not check the details contained in application forms, allowing those who are dishonest too get away with their deception.
The Financial Services Authority told the Daily Telegraph that it is "determined to cut down on mortgage fraud" and had already "banned a number of brokers who have been involved in knowingly overstating the income of mortgage applicants".
According to Radio 4''s File on 4, a number of brokers are advising clients who are on low incomes to inflate their salaries in order to make them appear to be less likely to default on the loan, resulting in buyers often signing up for loans they cannot afford to make repayments on.
One man reported he had been told by his broker that he should claim he earned £50,000 a year, despite his actual income standing at £25,000.
Lenders who issue self-certification mortgages often do not check the details contained in application forms, allowing those who are dishonest too get away with their deception.
The Financial Services Authority told the Daily Telegraph that it is "determined to cut down on mortgage fraud" and had already "banned a number of brokers who have been involved in knowingly overstating the income of mortgage applicants".
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