With The Mortgage Works pulling out of the self certification market last week, it seems to indicate the end of self cert mortgages as we know them.

The remaining lenders, namely Platform and Beacon, will almost certainly follow suit, and then there will be none.

Rumours have been rife that as part of the FSA review they will potentially ban self-cert mortgages, and so it looks like lenders are pre-empting this decision by simply withdrawing these types of products. Not good to be seen to be last man standing, so to speak. Fast-track mortgages (which were never really meant to be self-cert but fast-track as in fast track underwriting) are also being withdrawn by various lenders across the board.
The Council of Mortgage Lenders are saying self-cert shouldnt be banned but that we should all revisit the definition of self-cert and take practical steps to make sure affordability considerations have been taken. Hmm.

What does this all mean? Well, going back to my newsletter in April (What, you cross reference your own newsletters? Sad, isnt it) I spoke about the self-cert trap.

It seems that self-cert trap is well and truly here. How?

Anyone who took out a self-cert mortgage within the last few years and now wants to move will have great trouble, unless they can now prove their income. Apart from the option of porting their existing self-cert mortgage, they could be trapped in their property for quite a while that is until the FSA and the lenders decide that self cert mortgage are valid again. It is not only those who are trapped, but there are thousands of new applicants that, for whatever reason, will find it difficult to prove their income who now will be unable to get a mortgage.