Only 0.7% of mortgage brokers’ business in the second quarter of 2010 was made up of self-certification loans, according to Paragon Mortgages’ FACT research.
Self-cert has accounted for a declining proportion of brokers’ business since Paragon introduced the question in FACT in the first quarter of 2007, when self-certification mortgages accounted for 13% of business.
Sub-prime mortgages also account for a significantly lower proportion of business than in the first quarter of 2007, although it has picked up from its lowest point in the second quarter of 2009. Sub-prime accounted for 7.2% of business during the first three months of 2007 but declined dramatically to the point where it represented just 0.4% of business in the second quarter of last year. The proportion of sub-prime business has since recovered to 1.8%.
Paragon has published this research after the FSA proposed last week to put an end to self-cert through its ‘Mortgage Market Review: Responsible Lending’ paper by requiring verification of borrowers’ income in every case. It claimed that income was not verified on 43% of mortgages written in the first quarter of the year.
John Heron, Paragon Mortgages’ managing director, said: “It is not surprising that the level of both self-cert and sub prime business going through brokers has declined over this period because lenders simply aren’t making the products available. Since the onset of the credit crunch