AMI not impressed with BBC's claims

Focussing on the non-conforming sector, the programme highlighted problems with mis-selling and underhand tactics to boost a borrower's maximum loan amount.

Chris Cummings, director general of the AMI, said: “Self-certification mortgages in the non-conforming sector are a specialist product that serve a relatively small number of consumers. It is an important option for certain individuals, but it forms a very small part of the overall mortgage market, accounting for less than 5 per cent of intermediary mortgage advice.

“We do not condone any brokers who encourage consumers to make fraudulent applications. As a trade body we have produced guidance on self-certification products and encourage all brokers to carry out due diligence.

“We welcome the action that the FSA has taken in the non-conforming market against a small number of individuals that have broken the law. However, the FSA’s report on the industry in July this year did not identify any significant evidence of sub-prime mortgages being sold incorrectly.

“Ultimately, there is a three way relationship between the lender, the broker and the consumer. Each party has a responsibility for the actions they take. The lender should ultimately be lending responsibly and while some do run plausibility tests to check a consumer’s suitability this is not universal. Some lenders have failed to fully enforce their responsible lending policies in the sub-prime sector in recent years and there will be an inevitable tightening in the markets.”

Peter Williams, executive director of IMLA, agreed: “The BBC’s File on Four presented a somewhat sensational and alarmist view of the current and future state of the mortgage and housing markets.

“While acknowledging that there are some problems, we would refute the suggestion that these practices are commonplace in either the self-certification or the buy-to-let markets.

"Across the sector, sound underwriting procedures are applied in accordance with best practice and the regulatory principles of the FSA, including the obligation to treat customers fairly. Indeed, we would take issue with the suggestion from Mick McAteer that regulation in this country is ‘very weak’.

“Many thousands of borrowers use this type of product every year without any problem. Lenders have measures in place to detect fraudulent declarations by customers, although inevitably this still does occur from time to time.

"The intermediary based lender sector remains committed to continuing to help legitimate customers use the self certification range of products when appropriate, and will work with the FSA, AMI and other interested parties to ensure that the highest standards are maintained in this sector of the mortgage industry.”

“The problems highlighted regarding discounts and valuations in the Buy to Let market have been identified and the industry has taken this up with the Royal Institution of Chartered Surveyors and most recently with the House Builders Federation.”