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Online self-cert lender will sidestep need for mortgage advice

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  • 17/11/2015
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Online self-cert lender will sidestep need for mortgage advice
A new online-only lender offering FCA-outlawed self-cert mortgages plans to exploit EU e-commerce rules to offer loans without the need for advice.

Graeme Wingate, founder of unsecured lender Quick Loans, plans to set up shop in Eastern Europe to offer self-cert mortgages designed for self-employed borrowers, which were banned by the Financial Conduct Authority (FCA) last year in the Mortgage Market Review.

The lender will be funded by private investors rather than re-financing from the markets or obtaining funding from banks.

Wingate added that the firm would ‘save a lot of money’ by removing the need to provide advice to its borrowers.

“We expect demand to outstrip the capital that we’ve got just from word of mouth and people applying through the website we’ve got. We just don’t see any need to sell it through brokers.

“There was a lot of inflating of borrowers’ income through brokers to get mortgages completed in 2007. So if we handle everything from start to finish, it’s a lot more secure for us,” he said.

In a statement on the Quick Loans website, Wingate confirmed that the lender would launch in January 2016 having recently purchased the domain name SelfCert.co.uk.

While Wingate explained that the firm would be able to lend to customers within the European Economic Area (EEA) by utilising ‘passporting’ rules under the Mortgage Credit Directive, an FCA spokeswoman said this was not the case.

She explained that the lender would instead be able to offer its services through the E-Commerce Directive which enables firms within the EEA to offer their lending services to UK customers, but only where this is carried out at a distance and online.

“If something goes wrong, the Financial Ombudsman Service or the FCA will not be able to intervene as the service will be unregulated in the UK,” the spokeswoman confirmed. “There are no checks and balances so it’s really a case of buyer beware.”

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