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Self-certified mortgage lender launches

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Written by: Samantha Partington
18/01/2016
A self-cert lender offering mortgages which do not require borrowers to show proof of their income or insist on applicants taking professional advice has launched today.

Payday lender Quick Loans will sell mortgages only accessible through the internet from its domain name selfcert.co.uk. Although its loans will be available to British borrowers, the lender has got around UK legislation by basing itself in the Czech Republic.

A report on The Times website states the lender will launch with a tracker mortgage 2% higher than the Bank Base Rate (currently 0.5%). It is understood that loans will be capped at £500,000 with a maximum loan-to-value of 85%. Fees are expected to be around £600.

The lender’s offices will be based in Prague in the Czech Republic, according to the report, to allow it to circumvent the rules banning self-mortgages under the Mortgage Market Review (MMR). Its mortgage lending operation will be privately funded.

A loophole in EU legislation will allow the lender to bypass the requirement of giving advice to borrowers taking out this mortgage as long as it is based outside the UK.

A Financial Conduct Authority (FCA) spokesperson said: “A firm located in an EEA member state can provide a lending service under the Electronic Commerce Directive to UK consumers but the service has to be provided solely at a distance and on-line.

“This service, however, would not be regulated by the FCA and if something went wrong the FCA is not generally able to intervene, additionally there would be no recourse to the compulsory jurisdiction of the UK’s Financial Ombudsman Service.”

 

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