Mortgage sellers suspended

Three mortgage consultants have been suspended by high street lender Birmingham Midshires following claims that they may have encouraged people applying for home loans to exaggerate their incomes.

Birmingham Midshires, part of the HBOS banking group, said it had also temporarily stopped offering so-called self-certification mortgages through its 67 branches while it investigated the allegations. The lender took action after receiving information from the BBC's The Money Programme.

This centres on allegations that the three mortgage advisers "may have encouraged BBC staff posing as prospective customers to inflate their earnings at the application stage for a self-certification mortgage", said the lender.

Self-certification home loans are popular among self-employed workers. They allow borrowers to estimate their annual income without having to supply the traditional documentation such as wage slips.

But industry experts have expressed concern that some people taking out large self-certification loans could be very vulnerable to a downturn in the economy or a sharp rise in interest rates.

Birmingham Midshires said: "The seriousness of these allegations, which have not yet been substantiated in full by the BBC, are such that a detailed investigation is now under way."

A spokesman added: "Disciplinary procedures will follow if these allegations are substantiated following further detailed investigation." The allegations relate solely to self-certification mortgages.

All of the lender's 25 mortgage advisers have undergone "a thorough retraining", said Birmingham Midshires managing director Dan Watkins.

He said that suspending staff was standard procedure "while we investigate what are very serious allegations".

It is understood the allegations will be aired in The Money Programme special, Mortgage Madness, screening on BBC2 tomorrow evening.