80% of HBOS mortgages were given without income check

Up to 8 out of every 10 successful mortgage applications made to HBOS before the credit crunch were approved without proof of income, Michael Bolton has revealed in an interview with financial paper Money Marketing.

The former HBOS mortgage chief told the paper that:

“HBOS had five brands, all offering products without proof of income. It was offering a lot of self-cert, a lot of buy to let that needed no proof of income and a lot of Halifax’s mortgages were ‘non-verified income’ loans, which was essentially fast track. Before the credit crunch, as much as 80 per cent of HBOS’ loans were going through without full proof of income.”

Commenting on what may come as a revelation to many consumers, Ray Boulger, of mortgage broker John Charcol, said that until 2007 it was not uncommon for lenders to use credit scores to fast track mortgages.

Mr. Boulger said:

“A lot of mainstream loans were fast-tracked in the past, but HBOS went further than most lenders in that area of the market, in relation to bigger loans, so I would not be surprised if 80% were without full income verification.”

Halifax declined to comment on the findings, but a spokesperson stated:

“Our underwriting approach is carried out in a responsible manner. We have one of the best underwriting approaches within the mortgage market.”