# Valuer overvalued the house in 2006. Do I have any comeback now?



## josephine (8 Oct 2015)

I have a query re a valuation for a mortgage which someone else may have similar experience of, or thoughts on. 

My sister about 8 years ago took out a buy to let mortgage, but the property valuer put on the property valuation that the property had 6 bedrooms instead of 2. There always was, and still are, only 2 bedrooms in the little cottage.  The valuer also wrote that the property had central heating, when it had (and still has) none, and double glazing, when it had (and still has) only single glazing. The borrower only saw the valuation recently, when she obtained the file from the bank, and was shocked at the information on the valuation. 

Also, the "valuer" the bank used had only an engineering qualification, and was a self-employed draughtsman / engineer from his house. He is not known locally as a valuer. However the "valuer" was on the banks panel of valuers.  It is obvious the valuer inflated the property so the borrower could get a mortgage. If the property was valued correctly, the borrower would not have got the mortgage.  

I wonder what legal recourse this borrower may have when the valuer / bank's loan officer have breached the bank's criteria for issuing mortgages so that the borrower obtained a mortgage that they simply did not qualify for or could not afford, as mortgage repayments were very unsustainable?


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## Brendan Burgess (8 Oct 2015)

Neither the lender nor the valuer determined the price your sister paid for the house.  Your sister did that in a free and fair market with the seller of the property.

There is no issue here.  The lender may have a case against the valuer if your sister defaults. But your sister has no case.

Brendan


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## Dermot (8 Oct 2015)

josephine said:


> I wonder what legal recourse this borrower may have when the valuer / bank's loan officer have breached the bank's criteria for issuing mortgages so that the borrower obtained a mortgage that they simply did not qualify for or could not afford, as mortgage repayments were very unsustainable?



Is there a problem also with the calculation of the multiples of the salary/income that your sister was earning at the time when she was applying for the mortgage.
Was your sisters income at the time "doctored" up or was it submitted correctly.
What was the € valuation of the house at the time.
What was the amount of the Mortgage at the time.
What was your sisters income at the time.
What type of mortgage has she  SVR / Tracker or other.
Has your sisters income changed since.


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## 44brendan (8 Oct 2015)

I fully concur with the response by Brendan b above. These type of arguments have been put forward as a defense many times in the Courts and have achieved nothing for the defendant. I.e. your sister would be wasting her time. The valuer has no contract with your sister and could not be sued directly by her!


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## josephine (8 Oct 2015)

Really?  I never heard of valuers lying before on valuations....what was or is the point of valuations so?  
The borrower may not have had a contract with the valuer but she did make a sizeable cheque out to the valuer,for the valuation, as requested at the time.  That was an exchange of money for a service. The service was expected to be provided honestly, by a competent person. Any case law of a bank taking an action against a valuer so I wonder.


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## Brendan Burgess (8 Oct 2015)

Did she retain the valuer to negotiate the price of the house with the seller for her, or had she agreed the price beforehand? 

The valuer reports to the bank, but the borrower pays for it.

Brendan


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## Danny Boy (8 Oct 2015)

Su're she agreed to purchase the property at the contract price whether its a 2 bed or 6 bed house. 

The contract price & the valuation should be the same. Was she was using her PDH as security to make up a shortfall at the time or was she using savings - it doesnt make sense for a valuer to put an extra 4 rooms & central heating on a property if it was for sale for the correct price.

if you told me that he inflated the value of her existing property to make it more valuable for security purposes it would make more sense ie the bank was taking another charge on her PDH as security & she needed it valued for more.

I dont think she has a case as the value & contract price were the same & 2 bed properties in that area were obviously making that money at the time & she was obviously happy to pay that price.


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## josephine (8 Oct 2015)

The valuer was just employed by the bank, but paid by the borrower, to ensure the property was good security for the bank, was it was supposed to be etc.   Instead the valuer wrote it had 6 bedrooms instead of 2, had central heating etc. If the valuation had been honest  or done by a proper valuation firm the bank would not have made the loan.


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## emeralds (8 Oct 2015)

Did your sister see the valuation report before she went ahead and took out the loan?
Sorry - just saw now that you are saying she only saw the report recently.

How much did she borrow?


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## josephine (8 Oct 2015)

Thanks everyone for your replies.  Danny Boy, you say "it doesnt make sense for a valuer to put an extra 4 rooms & central heating on a property"...that is correct....but the property was quite unique with no comparisons nearby, and the borrower overpaid for it.  It was a buy to let mortgage so perhaps by adding the extra bedrooms and inflating the value and condition of the property, the valuer was able to get it across the line for his mate the mortgage broker?  Head office would not have lent that amount of money if it saw on paper it was for a 2 bedroom property in a rural location anyway.  I wonder if valuers (or an engineer / draughtsman who values)  just get paid if the valuation matches the contract price and the mortgage is drawn down?

Danny Boy, you wrote that "2 bed properties in that area were obviously making that money".  Actually no, they were not, but some 6 bedroom properties with central heating, double glazing etc were.


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## Danny Boy (8 Oct 2015)

Josephine, if 2 bed properties werent making that price then why did she pay that amount for it? After all she could have pulled out of the bidding at any stage if she thought it was over priced - she obviously didnt as she bought it.

Apologies if I'm not coming across on her side ( I'm not bank friendly) but I dont see her argument in that she paid the price that she was willing to pay for a 2 bed property.The valuer may have did what he did but the purchase pice was the contract price which was the value on the valuation report.

I dont think she has any case but if it was highlighted to the lender, the valuer may be struck off the valuers list for that bank but I can just hear his response...........we were so busy at that time that the valuation was typed by a temp or it got mixed up with another valuation in the same area etc etc..............


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## Monbretia (8 Oct 2015)

Was the BTL mortgage secured solely on the BTL cottage or jointly secured with her home?

Does her home have 6 bedrooms?


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## Brendan Burgess (8 Oct 2015)

Danny Boy said:


> Josephine, if 2 bed properties werent making that price then why did she pay that amount for it?



+1

Why didn't she buy a 6 bed house with central heating and double glazing for the same price?


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## josephine (8 Oct 2015)

Monbretia said:


> Does her home have 6 bedrooms?


No it has 2 bedrooms too. 

Yes the borrower got carried away at the time and decided to buy the cottage, and made a huge mistake. However she was not and is not a property professional. The valuer (or rather engineering draughts-man) who valued the property was a property professional and should have got basic details correct, even if he was not trained or had experience in valuations? Should not the bank have had a duty of care to the borrower to ensure the property was proper security.The mortgage on a 2 bedroom cottage was not sustainable or affordable; perhaps the bank head office thought a centrally heated 6 bedroom buy to let may have been as she vaguely remembers the broker saying that he may get the valuer to put down "an extra few bedrooms" to help get the mortgage. The borrower thought the broker was joking and was extremely surprised to see the valuation report only recently. She did not see it at the time of taking out the mortgage, and was not asked to supply projections or figures for futures rents etc. If she had been, she would have realized it was un-affordable and would not have taken out the mortgage.

I gather the bank has changed its lending policies and no longer deals with the broker but is there anything my sister can do?


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## moneybox (8 Oct 2015)

I gather your sister's little cottage is now in huge negative equity as property in many parts of rural Ireland is still in the doldrums and will be for the foreseeable future.   I think your sister has to take personality responsibility here, she took on a huge mortgage on a cottage that needed huge renovation i.e no central heating, double glazing and with only 'two bedrooms'. Now that the market is gone belly up its very easy to blame the bank, the valuer or the estate agent when at the end of the day your sister was the one that signed the mortgage deal. If it was the other way round and rural property had since spiraled she wouldn't be complaining. I am not saying it's tough, it is and there are many in her situation.


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## Monbretia (8 Oct 2015)

You're going nowhere with this one, unfortunate but true.   The value of a property is whatever someone is willing to pay, your sister made a boo boo paying way over the odds for the cottage.   The crooked valuer was another issue but either way did she not see herself that her income plus any rent she could get for a 2 bedroomed cottage, after all she knew there was only 2 rooms, was not sufficient to pay the mortgage.

Again as said if property had gone sky high and she was sitting on a nice profit she would be congratulating herself on her good buy, as it is unfortunately it's buyer's remorse, a common problem these days.


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## josephine (8 Oct 2015)

Brendan Burgess said:


> +1
> 
> Why didn't she buy a 6 bed house with central heating and double glazing for the same price?



Because she does not have a business head, had other complications in her life at the time and just thought the cottage in the country was quaint, and she believed what she was told that it would make a good investment. She trusted the broker (who also was an estate agent) who said it was a good buy....who said he and the valuer and the bank worked out figures and that it was a good buy and she could afford it. They were the experts, and she was assured she could trust them. It seems the trust was misplaced when they may have calculated her repayment ability on a 6 bedroom buy to let instead of a 2 bedroom....but even then she would not have been able to make the repayments once the interest only period expired.

To think of an analogy, its a bit like buying a car, say an old ford fiesta, but the motor loan finance the garage arranged was for a fine bmw. Seems in this case the motor finance people got away with filling forms out incorrectly - for whatever reason - and will pursue the owner of the fiesta not just for the fiesta but the difference in price between the bmw they thought they lent on and the fiesta. That would not be allowed to happen in the motor industry.

Has anyone else in the country found that a "valuer" got important details wrong on a valuation like 6 bedrooms instead of 2, amount of valuation, central heating etc? If the banking system gets away with this sort of carry on then it will happen again, and thats in nobodys interest.

Thank you for your replies anyway.


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## Danny Boy (8 Oct 2015)

josephine, 
It's not like your sister found out lately that she bought a 2 bed house & not a 6 bed, she knew what she was buying, how much she was paying for it & she proceeded with the purchase. If it turns out to be a mistake she shouldn't be blaming other people for her poor decisions - she's not alone in making bad decisions during the Celtic tiger years.

The broker didn't access her application or give her the money,he presented the application to the bank & they lent her the money based on her financial situation.She wouldn't have got the mortgage unless her income allowed her to borrow it. 

No matter what the valuer put on the valuation,  she chose to buy a 2 bed cottage without central heating & was happy to buy it at the price.

Unfortunately she has no case.


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## Bronte (9 Oct 2015)

josephine said:


> but she did make a sizeable cheque out to the valuer,for the valuation, as requested at the time. .



How much did the valuation cost?


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## Bronte (9 Oct 2015)

josephine said:


> I wonder if valuers (or an engineer / draughtsman who values)  just get paid if the valuation matches the contract price and the mortgage is drawn down?



No they get paid for doing a valuation. It has nothing to do with the contract price and mortgage draw down.  If it were linked to this it would skew valuations. 

Valuers get paid by the borrower from the banks approved valuers list. In this case they got paid for the valuation by the borrower, your sister.


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## Bronte (9 Oct 2015)

josephine said:


> No it has 2 bedrooms too.
> 
> he vaguely remembers the broker saying that he may get the valuer to put down "an extra few bedrooms" to help get the mortgage.
> 
> She did not see it at the time of taking out the mortgage, and was not asked to supply projections or figures for futures rents etc. If she had been, she would have realized it was un-affordable and would not have taken out the mortgage.



This is going to be harsh so don't read it if you don't want to hear it.

- Borrower buys investment property without knowing anything about property

- The bank did have proper security, they have it on this property and your sister is liable wheter the property is worth the same amount of the mortgage or not they have their security, which your sister if fully liable for

- Borrower purchases with a mortgage that was not sustainable.  Why?

-Borrower purchases with a mortgage that was not affordable - can you explain this? Are you saying from day one she couldn't afford the mortgage?

- Borrower knew the valuer was playing hocus pockus with the figures (as was the whole country back in the day and we all knew it the banks, the brokers, the valuers and the borrowers  - false P60's, inflated rent counted as income etc )

- Borrower buys house in the middle of no where, with single glazing and no central heating, does she need to be a professional to understand that nobody would rent such a property, not unless they were desparate.  Would she live in it?

- Borrower never bother to run a rental projection herself !  Whose fault is this?  You seem to be implying it's the banks or brokers or valuers fault?


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## Bronte (9 Oct 2015)

josephine said:


> he believed what she was told that it would make a good investment. She trusted the broker (who also was an estate agent) who said it was a good buy....who said he and the valuer and the bank worked out figures and that it was a good buy and she could afford it. They were the experts, and she was assured she could trust them. It seems the trust was misplaced when they may have calculated her repayment ability on a 6 bedroom buy to let instead of a 2 bedroom....but even then she would not have been able to make the repayments once the interest only period expired.



OMG.  Even aside from that, did she not even do some basic math on this?

As your on a hiding to nothing with your queries how about you actually ask the questions that might help her.  It may not be solveable but then again there might be a solution.  If you want help with that you have to give us the following details:

Mortgage
Value
Arrears
Repayments
Interest rate
Rental income
Rental history (easy, impossible, hassle, distance)
Salary
Other property
Married or partner - do they own property
Their salary
Ages
Kids


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## josephine (9 Oct 2015)

Danny Boy said:


> She wouldn't have got the mortgage unless her income allowed her to borrow it.


That may be what you would like to believe. Its common sense that she SHOULD'nt  have got the mortgage unless her income allowed her to borrow it. She did however get the mortgage even though her income was not sufficient to pay the mortgage. The bank may have calculated her repayment ability on a 6 bedroom buy to let instead of a 2 bedroom, but even then she would not have been able to make the repayments once the interest only period expired.
You saying the borrower "wouldn't have got the mortgage unless her income allowed her to borrow it" is like saying engineers wouldn't have built longboat quay if it was a fire trap, or VW engineers wouldn't have tried to fool consumers or regulators either.



Bronte said:


> The bank did have proper security, they have it on this property


The bank does not have the security it thought it had - it thought it had the title on a six bedroom centrally heated, double glazed property worth xxxxxx in year yyyy.  It turns out two other valuers, proper valuers! -valued it at nearly half that (one that year, one a year afterwards), as it was really a 2 bedroom cottage.



Bronte said:


> - Borrower buys house in the middle of no where,
> 
> - Borrower never bother to run a rental projection herself !  Whose fault is this?  You seem to be implying it's the banks or brokers or valuers fault?


It is not quite in the middle of nowhere. The bank should have checked to see if the borrower could afford the mortgage or not. She was told she could, by the people who were so called property and financial experts. Would it not be normal for a bank to see if a borrower could afford a mortgage or not? Of course hindsight is a wonderful thing, she should have asked for a copy of the valuation and the projections at the time.  



Bronte said:


> Borrower knew the valuer was playing hocus pockus with the figures



Incorrect. As said before "the borrower vaguely remembers the broker saying that he may get the valuer to put down "an extra few bedrooms" to help get the mortgage. The borrower thought the broker was joking and was extremely surprised to see the valuation report only recently." 

The borrower was not given a copy of the valuation at the time, despite having paid for it. The borrower has paid a heavy price and nobody is suggesting she does not deserve to suffer a major loss. Indeed her life has been ruined. It would not have been had the valuer and bank done their jobs properly and honestly. Yet they have got away with it, so far at least?
What about the role of the "valuer"- as the self-employed engineer / draughts-man was called, and the bank? Anyone else know of a case where a property price was inflated and the valuation included 6 bedrooms instead of 2, heating and glazing etc changed so the buy to let mortgage would look half viable to a bank?
Or is this case exceptional?


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## Monbretia (9 Oct 2015)

Copy of valuation reports were sent out with loan offers, how come she is only seeing it now?


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## josephine (9 Oct 2015)

Monbretia said:


> Copy of valuation reports were sent out with loan offers, how come she is only seeing it now?



What do you mean "were sent out with loan offers"?  They were not in this case, at least not to the borrower. The borrower did not see the valuation until years after the mortgage was arranged, and had to request it. Is it normal practice for a bank to (a) see if a person can afford repayments and (b) send out a valuation report with a loan offer? Also, the borrower was not told or given any indication how much the monthly mortgage repayments would be once the interest only period of a few years expired.


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## Grizzly (9 Oct 2015)

The valuation report is a report that values the property. It is not a structural report. The information is for the banks benefit. They are only interested to see if the house is worth the money being advanced against it. I am aware that the financial institution gets the borrower to pay for this report in most cases. It is up to the borrower to get their own structural survey.
Back in the day when I was arranging valuation reports, it was common practice to tell the valuer the purchase price of the property. In 99.9% of cases the valuation report matched that price unless there was something drastically wrong with the property such as subsidence etc


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## Monbretia (9 Oct 2015)

Yes, copies of valuation reports have to be sent out with loan offers, it is normal practice.


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## Danny Boy (9 Oct 2015)

Monbretia said:


> Yes, copies of valuation reports have to be sent out with loan offers, it is normal practice.



This is correct.

Josephine,
when your sister signed the mortgage application did she state that property she was purchasing was a 2 or 6 bed property? Look at it this way, if she signed the application saying that it was a 6 bed instead of the 2 bed then the way a bank or FSO would look at it was that she knowingly lied on the application to get the mortgage. Theres no buts of ifs or the broker completed the blanks - her signature is on the application end of story. 

Its beyond belief that someone would buy an investment property & not know or ask what the full capital & interest repayment would be once the interest only period ended - theres plenty of calculators online or a phonecall to the bank that would have told her that.

When buying anything of value you have to do a certain level of due diligence which your sister obviously didnt. 

If I was you I'd leave it go as you will only get more agitated & its going nowhere. She's not alone in making poor decisions in the tiger years, theres plenty more out there in worse situations.


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## moneybox (9 Oct 2015)

josephine said:


> Its common sense that she SHOULD'nt  have got the mortgage unless her income allowed her to borrow it. *She did however get the mortgage even though her income was not sufficient to pay the mortgage.*



How then did she pay the mortgage from day one if her income wasn't enough to cover it?



josephine said:


> Incorrect. As said before "the borrower vaguely remembers the broker saying that he may get the valuer to put down "an extra few bedrooms" to help get the mortgage. The borrower thought the broker was joking and was extremely surprised to see the valuation report only recently."



 Most bizarre

This is very much a case of amateurish property speculation and your sister by the sound of it has got terrible burned. 

Consider giving the details Bronte is asking for on post no 22 above and maybe some solutions may become apparent in order to further help your sister.


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## josephine (9 Oct 2015)

Grizzly said:


> The valuation report is a report that values the property. It is not a structural report. The information is for the banks benefit. They are only interested to see *if the house is worth the money being advanced against it.*



Correct.  That is what is supposed to happen.  But what happens if the house is *not *worth the money being advanced against it?



Grizzly said:


> Back in the day when I was arranging valuation reports


Were all valuers proper, reputable valuers who worked as auctioneers / valuers, and who had training and experience in valuing property? Would an engineering technician / draughts-man qualification suffice to be on a bank valuation panel?
Did you ever come across a valuation where extra rooms were added, a property value - or potential buy to let income increased etc?   A yes or no answer will suffice.



Danny Boy said:


> Its beyond belief that someone would buy an investment property & not know or ask what the full capital & interest repayment would be once the interest only period ended


I have seen the file and the bank did not indicate what the *monthly* or indeed yearly interest and capital repayments were likely to be.  My sister did ask the broker but she was told it would be impossible to know exactly as interest rates would fluctuate, but that she could afford it, they calculated that or they would not be lending her the money, the broker said. Leave that to the experts, he said. Should the bank not have indicated likely monthly capital and interest repayments?




Danny Boy said:


> when your sister signed the mortgage application did she state that property she was purchasing was a 2 or 6 bed property?


On the mortgage application, which the broker filled in and my sister signed, it said it was a cottage and the address but it did not give the number of bedrooms, surprise surprise!




moneybox said:


> How then did she pay the mortgage from day one if her income wasn't enough to cover it?



it was interest only for the first number of years, but the interest only period has expired. She has had a miserable life, no social life or holidays, sold her car and used up savings etc.



Monbretia said:


> Yes, copies of valuation reports have to be sent out with loan offers, it is normal practice.



And as it was not, does she have any comeback?  The reason they presumably did not send the copy of the valuation report at the time was because if they did, she would have seen something was very wrong. (6 bedrooms instead of 2 etc).


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## emeralds (9 Oct 2015)

How much did she borrow? At what rate? And what was her income at the time?


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## Bronte (9 Oct 2015)

I'm wondering what is triggering this now, must be interest only is up.

J - her life is not ruined, she is having a very difficult time of it, but far too much energy is wasted on venting on this thread instead of focusing on solutions.  How about some figures please, that's if you genuinely want to help your sister.

If you want to continue blaming the bank, the broker the valuer you would be better off contacting those madcap organisations that give amazing 'advice' to in debt borrowers clutching at straws.

By the way, what did your sister think would happen when the interest only was up?


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## Grizzly (12 Oct 2015)

So what you are saying is that the broker, completed the mortgage application form on behalf of your sister, leaving out relevant information but your sister signed it anyway, Would she not have filled in the blanks? Did the broker then fill in the blanks after with false information?
Did your sister conspire with the broker to get a loan on a supposedly 6 bedroomed house when it in fact had only two bedrooms?
Are you saying that the broker and valuer were in cahoots to get this loan for your sister and she turned a blind eye to what was going on?
This was a buy to let. Had she been through a mortgage experience before?


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## josephine (12 Oct 2015)

Grizzly said:


> So what you are saying is that the broker, completed the mortgage application form on behalf of your sister, leaving out relevant information but your sister signed it anyway



The broker said it was a cottage and the address but it did not give the number of bedrooms.  The broker was the expert at mortgages and advised accordingly.




Grizzly said:


> Did your sister conspire with the broker to get a loan on a supposedly 6 bedroomed house when it in fact had only two bedrooms?



My sister would have had no control on what it was valued at, or what the valuer would have written.
As said before "the borrower vaguely remembers the broker saying that he may get the valuer to put down "an extra few bedrooms" to help get the mortgage. The borrower thought the broker was joking and was extremely surprised to see the valuation report only recently." My sister thought someone from the bank would go out with the valuer to inspect the property, such was her innocence!  I wonder does auditing of valuers ever happen?  What is your experience on this, as you have arranged valuations?



Grizzly said:


> Are you saying that the broker and valuer were in cahoots to get this loan for your sister and she turned a blind eye to what was going on?



My sister did not see the valuation or know what was on it until years later. Like buyers of Priory Hall and Longboat quay, she trusted other peoples - the "experts!"- assurances at the time, and had other things to worry about. Perhaps this individual broker and the individual self-employed home based valuer were more interested in their commission / targets / bonus than anything else? Why else would they and the bank let a loan slip through when they know the borrower could not pay it back once the interest only period was over? 
Ever heard of that happening before?

Perhaps an investigation should be carried out, do you not think? So history will not be repeated, so to speak. Do you think its ok the valuer valued it as a 6 bedroom, double glazed centrally heated property?  How do you explain two other valuers, proper valuers! -valued it at nearly half that (one that year, one a year afterwards), as it was really a 2 bedroom cottage?



Grizzly said:


> This was a buy to let. Had she been through a mortgage experience before?


No.  It was a means of "getting her foot on the property ladder", the broker said.  She was inexperienced and had not a business head. She did not even know a copy of the valuation report was supposed to have been to be sent out with the loan offers. There was no documentation from the bank at the time saying she should have got a valuation report. Have you ever heard of that happening, no valuation report with loan offer, but bank reluctantly releasing it after several requests years later?

Now, I have answered your questions, Grizzly.  Any chance you would please have the courtesy of answering mine, the ones I asked you already, seeing as you say you have experience of "arranging valuation reports".  Here they are again, the questions I asked you on Friday:

(a)  You wrote "The valuation report is a report that values the property. It is not a structural report. The information is for the banks benefit. They are only interested to see if the house is worth the money being advanced against it.
I wrote "Correct. That is what is supposed to happen. But what happens if the house is *not *worth the money being advanced against it?"

(b) Were all valuers proper, reputable valuers who worked as auctioneers / valuers, and who had training and experience in valuing property?

(c) Would an engineering technician / draughts-man qualification suffice to be on a bank valuation panel?

(d) Did you ever come across a valuation where extra rooms were added, a property value - or potential buy to let income increased etc? A yes or no answer will suffice.

Thank you.


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## dereko1969 (12 Oct 2015)

You've stated twice that two other valuations were carried out on the property, one the year of the loan and the other the year after.
How and why were these done?
Why did your sister not act then, within a few months of her purchase at a price significantly above the second valuation she got?
There is an awful lot not adding up in this story.


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## Gerry Canning (12 Oct 2015)

Josephine.

:Looks like your sister was naiive and got well caught by unscrupulous people and banks who just wanted to lend.
on your questions.

A  = tough luck.
B = none.
C = Could be ,.
D= Far too often.

I know you are trying very hard (I have sympathy with you) to see if there is a real chance of success in chasing the {experts} but I just don,t see it.
Brendans original answer holds , Sorry !


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## Grizzly (12 Oct 2015)

When I arranged a valuation I chose from a list of valuers on a panel. Usually the one nearest the house.
It would appear that a similar system was in place with your erm sister.
When I arranged a valuation I chose from a list of valuers on a panel. Usually the one nearest the house.

Who says that the house was not worth the money being advanced against it. Except you. A 5 bedroomed house in Tallaght would not be priced the same as a 5 bedroomed house in Ballsbridge. Land/location can add value to a house, did the cottage have much land? Maybe the bank took other factors into consideration before advancing the loan.

Yes. All valuers on the panel where I worked had many years experience in valuations.

I never came across a house where extra rooms were added to the valuation report.

I know for a fact that the customer ALWAYS received a copy of the valuation report.

Did your sister have a solicitor to advise her, examine the deeds etc? He also gets a copy of the loan approval letter plus supporting documentation.

I certainly remember seeing, false P60'S, false payslips, exaggerated overtime claims, people stating that they would rent out a bedroom in their house when they never had any intention of doing this in order to get a larger loan.

When your sister arranged Fire Insurance for the property, which would have been compulsory before getting the loan, how many bedrooms did she state were in the property when completing the form? This is a standard question on every proposal form. What did the policy document state when she got her copy?


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## orka (12 Oct 2015)

josephine said:


> (a)  You wrote "The valuation report is a report that values the property. It is not a structural report. The information is for the banks benefit. They are only interested to see if the house is worth the money being advanced against it.
> I wrote "Correct. That is what is supposed to happen. But what happens if the house is *not *worth the money being advanced against it?"


As long as the bank is paid its interest and eventually its principal, they don't care if the valuation is wrong.  If things go pear-shaped they will pursue the borrower as much as they can - all the way to a forced sale of the property if necessary; then they will continue to pursue the borrower as much as they can for any shortfall.  Having crystallised a loss on a forced sale, the bank *may* go after the valuer if they feel they have a case and it is worth their while (no point pursuing the valuer if he has no money and/or no insurance).  If the bank succeeds against the valuer and he (or his insurers) can mitigate the loss, the borrower's shortfall should be reduced by the net amount of any successful action against the valuer.  But it is totally in the bank's hands - they are the ones suffering a loss as a result of the valuer's incorrect valuation so only they can pursue the valuer.


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## josephine (12 Oct 2015)

dereko1969 said:


> You've stated twice that two other valuations were carried out on the property, one the year of the loan and the other the year after.
> How and why were these done?


Six months after the purchase, she became aware of someone elses valuation from someone, a friend of a friend, who had an auctioneer, a proper one with a commercial office, value it prior to her purchase. She was concerned and got another valuation. She mentioned the subject to the broker / estate agent but got fobbed off. She did not know then the banks valuer had valued it as a 6 bedroom property with double glazing etc.



Grizzly said:


> I never came across a house where extra rooms were added to the valuation report.



Thanks for that. Its clear that this case is very unusual, and the bank did not carry out due diligence and have questions to answer in relation to their valuer. Maybe thats at least partly why the bank have offered her a deal / a large reduction on the balance owed provided she signs a non disclosure document. Hence neither she or I are going to divulge details of the location, name of bank, amount of loan or write-down etc as someone may identify her.



Grizzly said:


> When your sister arranged Fire Insurance for the property, which would have been compulsory before getting the loan, how many bedrooms did she state were in the property when completing the form?


Two bedrooms of course, she never dreamed anyone would put anything but that on any documentation or anything else. It was always 2 bedroom-ed as far as she was concerned.


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## Mackemdub (12 Oct 2015)

whether there is any blame here or not, and to who the liability is (or might be), is perhaps irrelevant as i believe any action would be statute barred at this stage?


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## Danny Boy (12 Oct 2015)

Thanks for that. Its clear that this case is very unusual, and the bank did not carry out due diligence and have questions to answer in relation to their valuer. *Maybe thats at least partly why the bank have offered her a deal / a large reduction on the balance owed provided she signs a non disclosure document.* Hence neither she or I are going to divulge details of the location, name of bank, amount of loan or write-down etc as someone may identify her.

Josephine,
in fairness its only taken you 11 posts to let people know that theres a bit more to the story - these are the same people who were trying to give you some free advice. You wont be wasting anymore of my time anyway.


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## josephine (12 Oct 2015)

DannyBoy, I actually answered every single question / point you raised, and corrected you on assertions you made which were false. I also asked you a question "Should the bank not have indicated likely monthly capital and interest repayments?" and you did not reply. The majority of mortgage brokers and valuers and bankers we assume are honest and done things properly, indeed my sisters own bank refused to lend her money for the property at the time, which was quite correct. It appears a small amount of professionals in the banking / valuation fields may have cut corners / acted improperly in the boom, just as a minority of other professionals (e.g. surveyors / developers/ architects / fire engineers etc) may have done. Thank you to all who have answered. We were interested in seeing if anyone else had come across a valuer who added an extra four bedrooms etc or who made a dodgy valuation. While my sister has lost a lot,we wondered if the problem she had with her valuation and mortgage was a common one, if the bank should have checked her repayment ability and if banks have taken steps to avoid it happening to others. If lessons are not learned then history can repeat itself.


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## moneybox (12 Oct 2015)

josephine said:


> *Maybe thats at least partly why the bank have offered her a deal / a large reduction on the balance owed provided she signs a non disclosure document*. Hence neither she or I are going to divulge details of the location, name of bank, amount of loan or write-down etc as someone may identify her.



I reckon you really need to get yourself a very good solicitor.


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## Monbretia (12 Oct 2015)

The loan offer would usually show what the payments would be on capital and interest, there is a load of stuff that comes out with a loan offer, including a valuation, and I would say most people read none of it.

In many years of dealing with mortgages I never saw a valuer mess with the number of rooms/description etc as you describe.    The mortgage forms I dealt with also had these questions on the form, number of bedrooms/living/bathrooms etc.   If again your sister did not fill this herself and then did not read what she signed when signing the application form it is most unfortunate.   

Even when dealing with 'experts' customers need to educate themselves with some small amount of knowledge at least no matter what area of life you talking about.


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## Grizzly (12 Oct 2015)

How did your sister plan to repay the loan from renting out a two bedroomed house with no central heating or double glazing?
As Brendan asked why did she pay the price for her house when she could have purchased a 6 bedroomed house in the same area for the same price?


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## josephine (12 Oct 2015)

Monbretia said:


> The loan offer would usually show what the payments would be on capital and interest, there is a load of stuff that comes out with a loan offer, including a valuation, and I would say most people read none of it.



The loan offer did not include a valuation or indicate what the monthly repayments were likely to be once the interest only period was up. If it did, the borrower would likely have run a mile as she would then have realised what her future monthly (or yearly) commitments would be.  Should a bank indicate what the monthly mortgage payments were going to be once the interest only period is up?  The bank does not dispute it did not supply the valuation at the time, or the likely monthly capital and interest repayments. 



Grizzly said:


> How did your sister plan to repay the loan from renting out a two bedroomed house with no central heating or double glazing?
> As Brendan asked why did she pay the price for her house when she could have purchased a 6 bedroomed house in the same area for the same price?



Answered in post no 17. She should have thought about how much rent etc it would generate and got independent advice on that instead of trusting the estate agent / broker. And the bank should have asked how the loan was going to be repaid instead of relying on the brokers own handwriting on the buy to let mortgage application form that the loan was going to be repaid by the rent. No calculations were sought or furnished. If the bank dealt direct instead of using that broker, whom it no longer uses, or if it had used a different valuer, the loan would not have been approved.


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## Butter (13 Oct 2015)

Does the mortgage application form state there are six bedrooms which will rented & give a rental value? Who filled in & signed the mortgage application? 

Your sister made a bad investment & regardless of the valuation she signed up for this without proper investigation. Why on earth would she buy a 2-bed cottage for the equivalent price of large six-bed modernised houses in the area? 

If she has a settlement from the bank they must have acknowledged some fault? Why would risk the non-disclosure agreement by asking for advice here? Surely a solicitor has been consulted?


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## Laramie (13 Oct 2015)

Josephine you are giving out to people for not answering your questions. Yet you have dodged several questions asked of you.
It seems your sister was watching one too many of Kirsty & Phil, Sarah Beeny and other similar TV programmes. These all tell you to purchase the worse house on the street, do it up and add value to it. Unfortunately your sister missed the key point. You have to purchase the house at rock bottom value, not pay the same price for it as the others that have already been improved on the street.
Regarding the extra valuation that a friend of a friend of a friend got etc. It seems to me that your sister never really expected to pay back the loan. (Can she do simple maths herself or was she relying on the local taxi driver to do them). It looks as if she hoped to flip it within a very short period of time. Maybe her breadman told her that they were going to build a shopping centre on the site?
She seems to be incredibly stupid in some ways but is cute enough to know exactly what she is doing. With a sister like you who can talk the talk, did she never discuss the purchase with you?
I would imagine that your sister can get on with the normal things in life such as paying her utility bills, arrange health insurance, deal with car tax, NCT, car insurance, TV & internet yet she didn't think to ask "What will my repayments be when the interest only period is up?".
As I said the plan all along was to flip it but the bottom fell out of the market and she got caught.


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## dereko1969 (13 Oct 2015)

So having already been refused by her own bank, did she not stop and think why she was refused? Did that bank not give her, in writing, a reason for the refusal?
And then she went straight to another mortgage broker to try and buy something that she'd been told she couldn't afford, and at no time did she stop and think this might not be a great idea? Where were you when all this was going on?


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## josephine (13 Oct 2015)

Butter said:


> Does the mortgage application form state there are six bedrooms which will rented & give a rental value? Who filled in & signed the mortgage application?


There is no mention of the number of bedrooms on the mortgage application form. My sister got a copy of all documentation from the bank for (I think she said) 6 or 7 euro. Parts of the buy to let mortgage application form are left blank. The broker filled it in and my sister signed it.



Laramie said:


> With a sister like you who can talk the talk, did she never discuss the purchase with you?


To answer your question, no, she did not discuss it with me in any detail at the time as I was overseas.



Laramie said:


> yet she didn't think to ask "What will my repayments be when the interest only period is up?".


As said before, she did actually, but she was fobbed off, and just told by the broker that the financial experts had gone through the figures and that she could afford it, otherwise they would not lend her the money. She asked again and was told it would depend on interest rates etc and nobody could predict what exactly the repayments would be, but the broker/estate agent said the rent would cover it. Why did the bank not tell her what the monthly or yearly repayments would be when the interest only period is up? Its not on the loan agreement. Should they not have seen the figures did not stack up?




dereko1969 said:


> Did that bank not give her, in writing, a reason for the refusal?


No they did not. I do not think they have to. I would be more concerned about what went on in the other lending institution.


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## Bronte (13 Oct 2015)

josephine said:


> To answer your question, no, she did not discuss it with me in any detail at the time as I was overseas.
> 
> .



This happened to me with a sibling, (not exactly the same issue - a personal guarantee instead) and when I arrived back one Christmas, years after the event, I was asked what I was going to do about it !

If your sister is in negotations it's clear the bank has something to answer for and coincidentally I have another sibling whose bank's solicitors have offered to 'settle' and I'll give you the same advice I gave which is being ignored, get a professional, I advised Padraic Kissane to the sibling and contact was made (sibling has been on here and knows I comment here etc)  but he's very busy with enough on his plate and sure they've got this far and why would they need professionals now.  (been in court many times)

The case also involves signing of a non disclosure.  (so far offered all debt written off and mortgage and property gone - but this is not acceptable to sibling !)


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## moneybox (13 Oct 2015)

Bronte said:


> e - but this is not acceptable to sibling !)




Not taking from the thread in question Bronte but what does your sibling want out of this.

As an after thought God only knows the shenanigans that went on over the tiger years.  All coming home to roost a is evident in this thread.


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## Bronte (13 Oct 2015)

moneybox said:


> Not taking from the thread in question Bronte but what does your sibling want out of this.
> 
> As an after thought God only knows the shenanigans that went on over the tiger years.  All coming home to roost a is evident in this thread.



Want's more, I need to be vague, to compensate for .... and might not be in situation due to confirmed overcharging, and tried to come to an arrangement before the mess with the intererest rate being too high and now turns out to be overcharging so mess need never have got to this stage etc. And has loads of 'shenanigans' going on too.  Which I presume is why the bank is now 'settling'.  I'm amazed at the audacity of the sibling's request, but this has been a long long road and very very vexed with banks.  Separately OH was with another bank 'forced' into converting business loan into personal loan or overdraft used to pay salaries would be pulled, bank calling to house pretending to be kind but really uselsss and also checking out to see if wealthy and these minions having no power to do anything.....

This is a couple willing to fight back on their own, experts on High court, procedures, affidavids, you name it they know it, and on first name terms with other side's legal teams.  And also experts on judges too !


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## moneybox (13 Oct 2015)

Bronte said:


> This is a couple willing to fight back on their own, experts on High court, procedures, affidavids, you name it they know it, and on first name terms with other side's legal teams.  And also experts on judges too !



Sounds great, hope they get on just fine and all will come to a successful conclusion.


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## Gerry Canning (13 Oct 2015)

With Moneybox on {chickens coming home to roost} .

Customers may well have been naiive and greedily stupid but they were not the Professionals.Consumers should be able to trust Professionals .
We spend time on CPD (continuous development courses) + Our supposed Regulators ?? ensure everyone has professional qualifications ostensibly to keep out incompetency ?

I find it amazing that these Professionals have sometimes not been jailed ?

Professionals should never be (fleece the customer merchants) yet in the (fluffy) times too many were and I fear more regulation without real teeth means we will continue to let chancers hide under (professional) label..


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## Bronte (13 Oct 2015)

moneybox said:


> Sounds great, hope they get on just fine and all will come to a successful conclusion.



The whole thing is so crackers you wouldn't believe it, and no mortgages being paid for a few years now, and they ran the receivers on one property and prevented them getting to a tenant on the other.  They threatened the locksmith (quoted law at him) and he refused to ever go out for the receiver again, and the price the receiver was charging was unbelievable too.  They've now asked the settlment bank for an astronomical sum  in compensation (6 figures, I nearly fainted myself), it's like an eposide of Dallas to me.  One of the well known top solicitors firms are handling it for the bank and the property worth less than the mortgage.


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## losttheplot (13 Oct 2015)

Did the rent cover the interest on the mortgage. Thinking may have been that rent covers the interest, when interest only period is up, sell the property and repay capital. Would be profitable when prices were only going up and bank would lend on this basis. Did the bank have a solicitor involved in the purchase? I thought for buy to lets banks would have a solicitor too.


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## moneybox (15 Oct 2015)

Bronte said:


> The whole thing is so crackers you wouldn't believe it, and no mortgages being paid for a few years now, and they ran the receivers on one property and prevented them getting to a tenant on the other.  They threatened the locksmith (quoted law at him) and he refused to ever go out for the receiver again, and the price the receiver was charging was unbelievable too.  They've now asked the settlment bank for an astronomical sum  in compensation (6 figures, I nearly fainted myself), it's like an eposide of Dallas to me.  One of the well known top solicitors firms are handling it for the bank and the property worth less than the mortgage.


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## moneybox (15 Oct 2015)

Keep us.posted Bronte, most Intriguing!


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