Self-cert mortgages were effectively banned with the introduction of MMR, however The Times reports that the lender will sidestep regulation by selling products from the Czech Republic.
Selfcert.co.uk will lend up to £500,000 at 85% LTV, with tracker rates starting from 2% above base rate.
The FCA says that there is a "clear and non-controversial case for product regulation of non-income verified (self-certified or ‘self-cert’ and fast track) mortgages".
The regulator added that self-cert mortgages were designed by the market to meet the needs of self-employed borrowers but "grew way beyond the consumer groups for which they were originally intended". Its analysis shows that self-cert borrowers take out larger loan amounts than borrowers with standard products and fall into arrears much more frequently.
To address these issues, the FCA introduced regulation requiring verification of income for all mortgage applications.
It said:
"We propose making the lender ultimately responsible in every sale for verifying affordability. We also propose that in each case, lenders assess consumers’ borrowing capacity based on free disposable income."
