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Mortgage brokers still let borrowers inflate salaries
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Some mortgage brokers are still letting self-employed borrowers inflate their salaries to obtain bigger home loans, according to a report by the financial watchdog.
The FSA said its study into self-certification loans, which allow borrowers to estimate their income without supplying documentation such as wage slips, found "significant weaknesses" in brokers' advice and selling of the loans.
A mystery shopping exercise found three out of 41 firms "prepared to discuss with clients how they could inflate their salary". There was no evidence the practice was widespread or systematic.
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