What happened to self-certification

What happened to Self-Certification?

Self-CertificationSelf-Certified Mortgages built a strong presence in the UK Mortgage Market from the nineties until 2009.

Initially designed for Self-Employed Mortgage applicants, the Self-Certified (Self-Cert) Mortgage was targeted specifically at Self-Employed applicants with a good deposit and clean credit history.

As funds for lending became more readily available due to new instruments in the Financial Markets, a number of individuals and companies began to see profit in more adventurous Self-Certified products with lower deposits where higher rates and fees could be charged. Mortgage Applicants with Adverse credit histories began to be catered for under Self-Cert, as did the Employed.

All of these markets were never intended to be covered under the original premise of the Self Certified regime. The practical idea of providing lending to a quality self-employed individual who had difficulty in formally proving income became lost. When Investment Companies began buying up large quantities of these loans based on the promise of continuing property price increases, the lunatics had really taken over the asylum.

When the funding dried up, so did the self-certified deals, and from mid 2007 to 2009 the Self-Certified market in the UK imploded.

Farewell to a good idea – badly handled.

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