According to a BBC report, Half of the U.K. sub Prime market involves borrowers who 'self certify' their income and work situation.
Insiders have told journalists that many brokers have been encouraging potential borrowers to exaggerate their incomes in order to secure a mortgage that they probably can't afford.
http://news.bbc.co.uk/2/hi/programmes/f ... 010415.stmA former broker in the industry told BBC Radio 4's 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.
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.
He got a loan of more than eight times his salary.
His monthly re-payments take up most of the family's income and he has been threatened with re-possession.
This kind of practise, which IMO is endemic in Ireland and the U.K. is a time bomb for the banking sector, not to mention the huge human cost of high levels of repossessions.