Practioner Unknown
Share this content
Tags:

Don't they believe us?

30th Jul 2013
Practioner Unknown
Share this content

It wasn't so long ago that mortgage lenders would accept an accountant's reference signed by a qualified accountant. Most banks even provided a list of the qualifications they would accept as signatories. But not any more apparently. It seems that several times a week I am being asked to obtain SA302s for clients to support mortgage applications (not the same clients, that is!). It must be driving HMRC nuts - sooner or later they are going to produce these automatically for online tax filings. Last week a client asked me to email a copy of his company's signed 2012 accounts direct to his mortgage adviser, which I did. We keep a PDF copy of all signed accounts, so I had an electronic copy of the original with both the client's and our signatures on it. Just has an email asking me to send the bank "the original signed paper copy"! Well, sorry but that's my file copy - but you can have a new signed copy if you insist - if you really trust us so little that a PDF isn't enough. I'm tempted just to send a file box full of the client's records to the bank and suggest that is they distrust us so much perhaps they ought to re-prepare the accounts from scratch so they can satisfy themselves that the figures are correct! Am I being paranoid, or are the banks just desperately looking for a reason to either turn down every application, or at least delay them as long as possible?

Tags:

You might also be interested in

Replies (5)

Please login or register to join the discussion.

avatar
By MarionMorrison
31st Jul 2013 09:19

Idiot policy

It's all about deniability.  The lenders want to be able to point to a paper trail which is compliant with a series of hurdles that have been FSA (or whatever) approved.  They don't actually care whether or not someone is capable of making particular mortgage repayments but that they pass pre-determined tests.  So someone in the industry has decided that because the info on an SA302 is coming from an unimpeachable source (ie the Revenue), that it is a document that can't be faked.

I'm sure we all know how it would be possible for Joe Public to forge an SA302 showing their £250K earnings by simply online filing figures, getting the SA302 and then revising the Return.  However this doesn't seem to have entered their heads because someone at the Building Society Association has said it's the bee's knees as far as verification goes.  

The mortgage system troops just apply the systems they've been given - it's not their fault that those who designed the systems are fools.

Thanks (0)
avatar
By Roland195
31st Jul 2013 10:18

Discussed before

We have discussed this policy before, particularly with the problem with low taxable profits because of AIA/Capital allowances etc. In theory, we should be able to explain this to the bank/lender however it may be we never get the opportunity before the computer says no. Then there is the potential ethical dilemma of a client who wishes to underclaim expenses to inflate their taxable profits...

Thanks (0)
PJ
By paulgrca.net
31st Jul 2013 12:42

SA302's

I have sent SA302s prepared by our software (keytime) to lendors previously in about a third of cases they seem to just accept them, the remaining 2/3rds come back and ask for HMRC copies - of course I tell our client that this may happen but it does speed the process up.

Just shows that the lendors have no idea what an SA302 is. 

Thanks (0)
avatar
By Cloudcounter
01st Aug 2013 09:05

It's not all bad

 - it saves having to complete the lenders' enquiry forms some of which asked some pretty dumb questions. 

One used to ask for gross taxable income, and then asked for an explanation if the figures returned were more than the net income after tax!

They were often sent over asking for a "reply by return of fax" - when you looked at the form it had been printed out a fortnight before and sat on somebody's desk until it suddenly became mega-urgent.

Thanks (0)
avatar
By Vaughan Blake1
08th Aug 2013 13:01

"Accounts sent directly to bank"

This comment rang an alarm bell.  Is there not a problem in doing this?

My policy is for  the client to send the accounts to the bank.  I seem to remember a problem with banks suing an accountants who did this.  The point was that the banks used the accounts in a way they were not intended for, bu,t as the accountant knew why the bank had asked then they (the accountant) it was assumed he had the point covered. 

Thanks (0)