As everyone knows I'm very active on Twitter, and recently I have entered into dialogue with a chap who calls himself advocatehorace.

Horace's description of himself is "we are a group of ex brokers bankers I.F.A s estate agents who are determined to expose lenders dodgy mortgages LLOYDS HBOSs etc whistle blowers wanted" [sic]. It has to be said, however, that so far Horace seems to be the only active member of the "group", and the group has no website to indicate activity other than by him.

Now, what Horace is worried about is the current status of self-certified mortgages. These, you will recall, are mortgages issued without proof of income and are often dubbed "liar loans" because people were able to declare that their income was higher than it in truth was, allowing them to access a higher level of borrowing.

There is little doubt that liar loans helped to push up house prices during the boom years, allowing people to "bid up" offers on desirable properties.

The reason liar loans were so prolific is understandable, too. Lenders were intent on gaining market share and, with a booming market, weren't too bothered if income multiples weren't all that accurate (if the lender defaulted he could sell the property, or the lender could repossess an asset which would no doubt - they believed - have risen in value in the meantime).

Brokers were happy for borrowers to take out bigger loans, because they received commissions relating to the size of the loan. Borrowers didn't mind cutting corners, because they wanted their dream home, they expected their income to rise to cover the monthly payments they couldn't really afford, and if everything went pear shaped they could sell up and downsize. Or so they thought.

In 2004 a BBC documentary found nine out of ten brokers in Ealing visited by the programme encouraged borrowers to lie about their income, and three in seven in Manchester. Nor were lenders bothered about how much income you declared. All three Halifax advisers visited by the programme offered to get borrowers loans of six times income, and one boasted of getting a loan for a customer of 10 times income.

At the time the Council of Mortgage Lenders said there was no problem, as self-cert made up just 1% of the market. By the time the authorities admitted it was a problem we were in the middle of the credit crunch in 2008, when the self-cert market had ballooned to 52%.

By 2008 the plentiful supply of mortgages dried up. People who expected to switch from one cheap deal to another found it wasn't so easy, and was maybe impossible, as lenders slashed the loan-to-value ratios they were prepared to lend at. Anyone trying to move their mortgage was liable to find that the amount of mortgage outstanding on their home was more than the LTV that a new lender would take them on at. In the worst cases they were in negative equity and squeezed at both ends - unable to borrow elsewhere and unable to sell.

This meant that borrowers had just one option - to roll over their mortgage deal to their lender's standard variable rate. This figure is often far higher than the rate they had already been bursting their buttons to pay - though it has to be said that in some cases SVRs were lower than the figure they were paying before

This much we know, and the Financial Service Authority's Mortgage Market Review has resulted in many of the worst excesses of the "light touch regulation" boom years being excised from the market. Self-cert mortgages are banned. Now lenders - not just brokers - must be sure a borrower can afford to pay their loan, making dissembling affordability that much harder for a borrower to do. Interest-only loans are a no-no, too, and lenders must be sure a borrower has a verified repayment vehicle in place if the loan is not structured on a capital repayment basis.

So far so good, but bad news for those stuck with liar loan, who find the new rules make their plight even worse.

This is where the blame game starts. People who are trapped in this situation are very angry that they are in the situation they find themselves in, and are looking for scapegoats. It's true that there are some clear cases of criminal fraud by brokers and lenders, who falsified earnings figures on self-cert mortgage application on behalf of borrowers unbeknown to those self-same borrowers, or who put them into a self-cert loan for the higher commission it paid when an income certified loan would have been satisfactory.

However, it has to be said that most of the time the borrowers went along with the scam, anxious to get the loan they wanted for the dream home they didn't want to lose. Anyone making a complaint about falsified documents to which they have put their own signature is going to find themselves in as much or more trouble than the broker, or at least with a lot of explaining to do.

Horace has come up with some fanciful suggestions, such as the involvement of HMRC in rooting out mortgage fraud. Well, you don't declare the amount of your mortgage on your tax return, so I don't think anyone who has falsified mortgage documents is in immediate danger from the taxman unless they are part of some high-profile investigation with other origins.

I think he is misunderstanding the new Mortgage Verification Scheme, which came in last September and which allows lenders to check income declarations with HMRC records in cases where fraud is suspected. The ability to cross check with tax records should help to crack down on the £1bn mortgage fraud that takes place every year. It doesn't, however, work backwards to check if you made a fraudulent mortgage application in the past. It could very well stop you getting a mortgage with another lender, however, if you want to switch from your current arrangement.

I'm afraid, Horace, that if you lied on your mortgage application in the past you are going to have to live with it. Lenders are not really interested retrospectively if you lied about your income to obtain your loan and are managing the monthly payments. After all people who told the truth may have lost their job and no longer meet the loan qualifications, but the lender's only concern is receiving the monthly payments. Why start raising issues that aren't causing a problem?

If you aren't managing too well, the lender may exercise forbearance. It is in its interest to do so if it thinks you will be able to pay in future or house prices might rise to cover the loss. It certainly doesn't want to repossess your home and consolidate its loss right now except in the most extreme circumstances.

If you are having payment difficulties now and are unlikely to be able to pay in future, and you can't move your loan because you lied in the past, then that is a bad place to be, and if you don't take some action to sort yourself out you could ultimately lose your home. But I'm afraid unless the broker falsified documents unknown to you you have nowhere to complain.

Now, the whole issue of how the liar loans story will pan out is an interesting one. If large numbers of liar borrowers start to default this will have very serious consequences for the housing market. But, although nearly half the market was self-cert in the final year of the boom, that doesn't necessarily mean the applicants were lying about their income and that they are now under water.

Only time will tell how the liar loan saga will unfold. If you fibbed on your mortgage application and you can't make your payments, get debt counselling help as soon as possble from a free service such as CCCS, National Debtline or Citizens' Advice.