Speaking at the Mortgage Business Expo in London, Lesley Titcomb, director of mortgages and small firm supervision at the FSA, said lenders have prevented mortgage access to workers with non-regular incomes.
When the FSA first announced it would make income verification mandatory for all mortgages, many in the industry said it would cut off access to mortgage funding for the UK’s many self-employed and contract workers.
In the past, these people would have applied for a self-cert or fast-track mortgage, which would not require income verification. However, some borrowers used the products to inflate their incomes and borrow unaffordable amounts.
Titcomb added: “Some have suggested that this means a self-employed person or a contract worker would not be able to get a mortgage and that we are blocking access to the market. This is way off the mark. We can think of no reason why the self-employed or a contract worker would not be able to verify their income.”
She said non-regular income is still verifiable, and said it is lenders who are often preventing people with erratic income streams from taking on a mortgage.
Many lenders insist on at least three years worth of accounts from the self-employed, but the FSA said it has never mandated this.
She added: “We do not want to introduce anything that is unworkable or that prevents people who can genuinely afford one and who can demonstrate that their stated income is genuine from getting a mortgage. But what I should be clear on is that the days of accepting a business card or some headed paper as proof of self employment and therefore income will be over.”
