Usernameinuse - I presume she had a solicitor, did they bring anything in the loan offer to her attention regarding the repayments etc or the interest only term?
She asked her solicitor what the monthly repayments (interest and capital) would be but the solicitor did not know, she said to ask the bank. She asked the bank and was fobbed off, it would depend on future interest rates. She asked again and was told not to worry, they would be affordable, they got her figures, the bank were the experts, they had decades of experience, sure was property not going up in value all the time and wouldn't her wages increase during the ten years too and anyway the banker said (verbally) she could maybe extend the interest only period at the end of 10 years if she wanted to etc. She was told the most important thing was for her to get her foot on the ladder, it was a great investment etc.
I presume she also got a copy of the valuation report, did she query the discrepancies in it?
No she did not get a copy of the valuation report until many years later when she obtained it in her file, after paying €6.35. Should she have got a copy of the valuation report at the time? Anyway the €6.35 was the best money she says she ever spent, to see what went on.There were two loan reports in the file. The first one was for her correct income, and the bank did not approve the loan. The second loan report shows the bank, unknown to her at the time, inflated her income on paper by over €60,000 per year, presumably so she would then meet the lending criteria by the bank.
Have you seen the actual loan offer?
Yes. No mention of what monthly repayments (interest and capital) would be.
I wonder if anyone would know if the bank was supposed to indicate what they would be likely to be in 10 years time if interest rates were eg 3%, 6% or whatever.
Not saying no one in a bank ever changed anything as obviously time has told us that did happen but I never came across it in the bank itself but did see stuff come in wrong.
I suppose back in the day bankers were expected to grow their loan books and perhaps sometimes got bonuses for reaching targets. I guess 99% of bankers behaved properly but as in some other professions and trades during the boom a few obviously did not.
Going forward, the PIA guidelines are quite clear, and state the types of debt that are excluded and cannot be covered by a PIA include "Debts arising from a loan (or forbearance of a loan) obtained through fraud or similar wrongdoing". The borrower says that if there was not "fraud or similar wrongdoing" on the part of the banker and his relation, the valuer, she would not have obtained the loan, and her life would have been much better.