A BBC investigation has found evidence of serious mis-selling in Britain's sub-prime mortgage market.
A BBC investigation has found evidence of serious mis-selling in Britain's sub-prime mortgage market.
Industry insiders have described how people have been advised to lie about their incomes to take out loans far bigger than they can afford.
Industry insiders have described how people have been advised to lie about their incomes to take out loans far bigger than they can afford.
Half of all sub-prime mortgages in the UK are self-certification mortgages, where borrowers state their income and lenders do not necessarily check.
Half of all sub-prime mortgages in the UK are self-certification mortgages, where borrowers state their income and lenders do not necessarily check.
The Financial Services Authority said it would "crack down on this abuse".
The Financial Services Authority said it would "crack down on this abuse".
The FSA refused to be interviewed for BBC Radio 4's File on 4 programme, which conducted the investigation.
The FSA refused to be interviewed for BBC Radio 4's File on 4 programme, which conducted the investigation.
However, the watchdog later sent a written statement to the BBC, saying that based on it own investigations and on information received from lenders and whistleblowers it had "banned a number of brokers who have been involved in knowingly overstating the income of mortgage applicants".
However, the watchdog later sent a written statement to the BBC, saying that based on its own investigations and on information received from lenders and whistleblowers it had "banned a number of brokers who have been involved in knowingly overstating the income of mortgage applicants".
A former broker in the industry told File On 4 that some advisers in the sector tell clients with low incomes to inflate their earnings on application forms to get outsize loans, which they often cannot afford.
A former broker in the industry told File On 4 that some advisers in the sector tell clients with low incomes to inflate their earnings on application forms to get outsize loans, which they often cannot afford.
'Inflated income'
'Inflated income'
Inflating the client's income is seen as an easy way for brokers to get the deal passed.
Inflating the client's income is seen as an easy way for brokers to get the deal passed.
One borrower whose real income was £25,000 told the BBC he was advised to double that on his mortgage application.
One borrower whose real income was £25,000 told the BBC he was advised to double that on his mortgage application.
He got a loan of more than eight times his salary.
He got a loan of more than eight times his salary.
His monthly repayments take up most of the family's income and he has been threatened with repossession.
His monthly repayments take up most of the family's income and he has been threatened with repossession.
It is impossible to tell how many other cases there are because few borrowers or mortgage brokers will admit to the practice, but campaigners fear it is widespread and have urged the Financial Services Authority to take action against the lenders and brokers involved.
It is impossible to tell how many other cases there are because few borrowers or mortgage brokers will admit to the practice, but campaigners fear it is widespread and have urged the Financial Services Authority to take action against the lenders and brokers involved.
You can hear more about this story on BBC File On 4, Tuesday 25 September 2007 at 2000 BST, repeated on Sunday 30 September 2007, 1700 BST.
You can hear more about this story on BBC File On 4, Tuesday 25 September 2007 at 2000 BST, repeated on Sunday 30 September 2007, 1700 BST.
Should more be done to crack down on this kind of abuse. Have you been advised to lie about your income when applying for a mortgage? Send us your views?
Should more be done to crack down on this kind of abuse. Have you been advised to lie about your income when applying for a mortgage? Send us your views?
