# Sue mortgage lender for unrealistic loan approval?



## rsta

Just wondering if anyone has ever sued their mortgage lender?

My mortgage was granted about 4 years ago and even back then I was struggling to pay it with a full weeks wages.

Is it possible to sue a mortgage lender for approving a loan that I would never be able to manage? 

Thanks


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## truthseeker

Why did you take out a mortgage that you were struggling to pay on a full weeks wages? Surely you have to take responsibility yourself for agreeing to borrow this amount if you found it a struggle to pay it back from the very beginning?
The bank didnt MAKE you borrow the money - you asked for it.


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## giles

I don't think so. You where an adult, you knew what you where getting into... if you couldn't afford a mortgage with a full weeks wages then you should never have gotten one. What where you thinking??

Another celtic tiger cub trying to shirk their responsibilities.


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## rsta

Calm down please! I'm no celtic tiger cub! And I'm not trying to shirk my responsibilities at all.

Just simply wondering if anyone has sued their lender? 

Its come up in conversations recently with a few friends of mine in similar situations. For example one of my neighbours was granted a mortgage of €240,000 in '07 while he was earning €28,000 per annum. He reckons he should not have been approved for that loan.


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## Time

There may well be grounds for such an action.


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## demoivre

truthseeker said:


> Why did you take out a mortgage that you were struggling to pay on a full weeks wages? Surely you have to take responsibility yourself for agreeing to borrow this amount if you found it a struggle to pay it back from the very beginning?
> The bank didnt MAKE you borrow the money - you asked for it.



Does the bank not have to take responsibility for being an irresponsible lender? The bank didn't have to lend the money. The mortgage is a two party contract so as I see it both parties are equally culpable where too much was lent and too much was borrowed. Actually I blame the banks more for devising 100% mortgages, 5 times salary mortgages, 40 year terms etc. I hope a day will come when bankers are held to account for their recklessness.


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## rsta

My mortgage loan amount approved and granted was 7 times my annual salary..!


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## elcato

> My mortgage loan amount approved and granted was 7 times my annual salary


In the reckless years banks changed the criteria by allowing you 40% of net income to be your monthly repayments. Low taxation meant this figure would easily surpass 4 times your salary. While banks were reckless they did not put a gun to peoples heads. Remember, the banking crisis came about because people can/wont pay what they owe back.


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## z107

> I hope a day will come when bankers are held to account for their recklessness.


That day should have happened around September 2008. However the government stepped in with their guarantee.
The banks will now never be held to account for their recklessness.


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## demoivre

elcato said:


> In the reckless years banks changed the criteria by allowing you 40% of net income to be your monthly repayments. Low taxation meant this figure would easily surpass 4 times your salary. While banks were reckless they did not put a gun to peoples heads. Remember, the banking crisis came about because people can/wont pay what they owe back.



And the reason some people can't pay back what they owe is because of the remedially stupid under writing criteria devised by the banks resulting in unaffordable loans been given out. The borrower should never have been giving the funds in the first place. There is equal culpability.


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## orka

demoivre said:


> The borrower should never have been giving the funds in the first place. There is equal culpability.


Ok, so say a judge agrees that the contract should never have been entered into in the first place so the contract is null and void - what's the upshot of that?  I don't think it would be 'sure don't bother paying it back' - much more likely to be 'contract declared void, put everyone back in their pre-contract positions, borrower to pay back money today' - will this help borrowers?


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## Time

The bank will have made a nice gift to the borrower. Without a contract they could not collect.


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## Brendan Burgess

I expect that you would have to show that they misled you in some way. 

In my experience of  mortgage applications, the misleading tends to come from the customer more than the lender.

Brendan


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## Mpsox

Brendan Burgess said:


> I expect that you would have to show that they misled you in some way.
> 
> In my experience of mortgage applications, the misleading tends to come from the customer more than the lender.
> 
> Brendan


 
Probably a valid point, especially if people were not 100% truthful as to their income. However it would be interesting if a borrower could prove they were advised to inflate their income by a broker, as to whether or not they would have a case against the broker.

In addition, a bank does have a legal duty of care. Interesting article on this here
[broken link removed]

There will probably be a test case on this at some stage over the next couple of years.


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## JoeB

While the banks were wrong to lend the money recklessly the 'punishment' for such actions would usually be that the shareholders would fire the board, and the bank would go under.

Our government stepped in and prevented that... so now the banks have gotten away with it.

I think legal actions against the banks will fail, but perhaps not against brokers who advised customers to break the law (or bend the rules). If the banks were legally not allowed to lend 240K on an income of 28K then yes, perhaps an action might be successful, although not cheap.

(Stress testing on 240K mortgage on 28K income... if interest rates hit 6%, interest alone = 14,400 per year.. this is unpayable on 28K)

Our government is to blame for not allowing the banks to go under... even though people would still owe their mortgages to somebody...


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## Jim2007

demoivre said:


> I hope a day will come when bankers are held to account for their recklessness.



But who appears more reclkess?  The bank that made sure it had a charge on what appeared to be a solid asset, valued by a third party or the guy who committed to pay it back on the assumption that the good times were here to stay... as they say it takes two to tango!

Jim


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## z107

> But who appears more reclkess? The bank that made sure it had a charge on what appeared to be a solid asset, valued by a third party or the guy who committed to pay it back on the assumption that the good times were here to stay... as they say it takes two to tango!


The banks were reckless for helping to inflate the bubble. They should have considered that they were lending in a bubble environment.


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## ney001

rsta said:


> Just wondering if anyone has ever sued their mortgage lender?
> 
> My mortgage was granted about 4 years ago and even back then I was struggling to pay it with a full weeks wages.
> 
> Is it possible to sue a mortgage lender for approving a loan that I would never be able to manage?
> 
> Thanks



Sue them for what, I mean how much? are you talking about suing them for the exact amount of the mortgage or is there a figure in mind? . I personally think the idea of suing the bank because they gave you a loan is ridiculous.  I was offered 200,000 above what we applied for but had the sense to say no and stick within our means i.e below the first time buyers threshold.  Even now that's a struggle but not as bad as having the extra 200,000 to pay.  Perhaps though the fact that the bank loaned more then they should have would be grounds to change your repayments etc to something more affordable.


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## AlbacoreA

I'm sure there's something that could be done, like reduce the interest and increase the term. So the bank makes no money on it, or loses, and the person is still responsible for their part of it.


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## twofor1

This ruling is interesting. It's on a larger scale than a home mortgage, but the principal is the same, the bank lent a wild amount of money to a local shopkeeper.

He said Mr McConnon decided to proceed and borrow the money and he could see no arguable basis for suggesting that he could be absolved from liability to repay.

http://www.rte.ie/news/2011/0304/mconnonj.html

http://www.rte.ie/news/2011/0124/mconnonj.html


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## southside100

what about the banks sending letters to customers saying they have been "pre-approved" for loans of 20k, ok its illegal for them to do it now but they will never be held accountable for this! I genuinely think people didn't have enough financial advice available at the time and now they are paying the price! Banks were bailed out for their mistakes, people unfortuantely will not be.


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## SarahMc

southside100 said:


> I genuinely think people didn't have enough financial advice available at the time and now they are paying the price! Banks were bailed out for their mistakes, people unfortuantely will not be.



But who would they sue for the fact they had no financial cop on, the dept of education, their parents?  It is not the banks job to teach financial literacy to people.


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## JoeB

Is a Justice correctly described as a 'Mr Justice'?, or is this like saying 'Mr Doctor'?

from link above, a few posts back.


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## Mpsox

SarahMc said:


> But who would they sue for the fact they had no financial cop on, the dept of education, their parents? It is not the banks job to teach financial literacy to people.


 
True but they may have a legal requirement to tell people to go out and get independent legal advice. The Financial Services Ombudsman report has plentty of examples where banks sold people financial products that were not suitable for their needs. Why should a mortgage be any different?


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## stephen1381

I think its unrealistic. Even if someone pulled it off It would be opening up a can of worms.


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## demoivre

SarahMc said:


> But who would they sue for the fact they had no financial cop on, the dept of education, their parents?  It is not the banks job to teach financial literacy to people.



So the reckless borrower should suffer the consequences of over borrowing but the reckless lender shouldn't suffer any sanction?


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## demoivre

JoeBallantin said:


> While the banks were wrong to lend the money recklessly the 'punishment' for such actions would usually be that the shareholders would fire the board, and the bank would go under.
> 
> Our government stepped in and prevented that... so now the banks have gotten away with it.
> 
> I think legal actions against the banks will fail, but perhaps not against brokers who advised customers to break the law (or bend the rules). If the banks were legally not allowed to lend 240K on an income of 28K then yes, perhaps an action might be successful, although not cheap.
> 
> (Stress testing on 240K mortgage on 28K income... if interest rates hit 6%, interest alone = 14,400 per year.. this is unpayable on 28K)



Another calamity of lending practice during the boom years was the way stress testing was done. Some banks got away with lending larger than appropriate sums by offering fixed rates over 3 or 5 years which weren't subject to the same levels of stress testing as a standard variable rate mortgage. AFAIK some banks didn't stress test at all on 5 year fixed rate mortgages !


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## SarahMc

It is a similar argument to fast food chains being sued by obese customers. 

The reckless customer suffers the consequences, but the chain selling fat laden food doesn't, because it comes down to Personal Responsibility.


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## demoivre

SarahMc said:


> It is a similar argument to fast food chains being sued by obese customers.
> 
> The reckless customer suffers the consequences, but the chain selling fat laden food doesn't, because it comes down to Personal Responsibility.



It's not similar because you can't attribute the obese persons weight problem exclusively to the fast food outlet. Diet at home, exercise regime, genetics etc would all be relevant.


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## SarahMc

You can't attribute the borrower's financial difficulties exclusively to the bank. Wage cuts, perhaps a growing family, other borrowings since taking out the mortgage would all be relevant.


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## orka

demoivre said:


> So the reckless borrower should suffer the consequences of over borrowing but the reckless lender shouldn't suffer any sanction?


Maybe not sanctions (and why sanctions for lenders but consequences for borrowers?), the reckless lenders ARE suffering the consequences - loan write-offs, wiped out share values, virtual nationalisations...  What sanctions do you want to apply to lenders that won't cost their owners (effectively us as tax payers of the State) any more money?


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## Jim2007

umop3p!sdn said:


> The banks were reckless for helping to inflate the bubble. They should have considered that they were lending in a bubble environment.



Perhaps, but then the same would have to be said of the borrower!  This would be almost an impossible to argue in court.  You'd have to have something very specific to an individual case to have any chance.  And I can't even think of what that might be.

Jim.


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## southside100

when someone took out their original mortgage they would have been stress tested to see if they could afford repayments with a 2% hike in interest rates. Now with banks making their Fixed Rates so unattractive, forcing people onto Variable Rates, which they can raise whenver they like, these rates will soon be well above the 2% stress tests amounts, so banks cannot say "people knew what they were getting into". As Mr Lenihan has said on many occasions "no-one could have predicted how bad this economic crash was going to be", so why help the banks and not the ordinary tax payer? So what if the banks share price has dropped, they will bounce back and recover as they always do, whereas mortgage holders are facing into 30 years of hardship, there is no light at the end of the tunnel for them


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## csirl

demoivre said:


> So the reckless borrower should suffer the consequences of over borrowing but the reckless lender shouldn't suffer any sanction?


 
The wreckless lender does suffer the consequences - the bank doesnt get paid if the borrower cant afford to pay.


If a borrower were to sue a bank, what would he be suing for? Usually you sue someone in a financial/contract matter because you have lost money. And the remedy is that you get awarded financial compensation for the loss of money. The OP was given TOO MUCH money, so he is financially better off than if the transaction had never taken place. The only logical outcome of a court case is that the OP should pay a lump sum plus interest bank to the bank!!!!


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## demoivre

csirl said:


> The wreckless lender does suffer the consequences - the bank doesnt get paid if the borrower cant afford to pay.



Relatively few houses are repossessed. What often happens when a borrower runs in to difficulty is the bank will extend the term of the mortgage thus reducing the repayments. The bank will make more in interest over the longer term on the mortgage and is thus rewarded for its reckless lending! Only the borrower suffers in this situation for his reckless borrowing.


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## southside100

why shouldn't the taxpayer help towards debt write downs for people, there are lots of things that taxpayers money goes towards that only benefit a small cross section of the community, single mothers allowance is one example, why can't mortgage assistance be another one?


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## csirl

southside100 said:


> why shouldn't the taxpayer help towards debt write downs for people, there are lots of things that taxpayers money goes towards that only benefit a small cross section of the community, single mothers allowance is one example, why can't mortgage assistance be another one?


 
The taxpayer is already stretched to the limit - is paying for too much already. A lot of people are finding it difficult to pay their own mortgages. Adding a few % onto income tax to make them pay other peoples mortgage arrears is not fair on them and will push many more into arrears.


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## orka

It's not just the cost to the taxpayer that makes it unfair - it's the potential benefit received. With something like your example of the single mothers allowance, it's means tested and everyone gets the same - for as long as the need exists. 

In helping out with mortgage assistance, you are enabling one group to keep something they should not have bought in the first place and thus aren't really entitled to. Consider 2 people working side by side, earning the same amount - X bought a 3-bed house (because he could and because he was worth it etc) and Y bought a 1-bed apartment because that's all he felt he could afford. Both are now in negative equity and are taking home less money - X is struggling to make repayments; Y finds things tight but can manage. Why should Y have to pay more tax to enable X to stay in a better home? In 20/30 years time, X will have a bigger asset than Y, partially state-funded.  It's not begrudgery - it's just fairness. I have no problem with people having better stuff than me - just don't expect me to contribute towards it.


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## marksa

rsta said:


> Just wondering if anyone has ever sued their mortgage lender?
> 
> My mortgage was granted about 4 years ago and even back then I was struggling to pay it with a full weeks wages.
> 
> Is it possible to sue a mortgage lender for approving a loan that I would never be able to manage?
> 
> Thanks


 
Probably one of the daftest things I have ever read on AAM. No one beat you over the head, offered you financial inducements etc so why should you be bailed out any more than any other joe public from that period of ridiculous throw-away-money era. Why should I as a tax-payer who did not leverage myself up to my eyeballs pay for your mistake. Just because there was lots of cash available for me to borrow did not mean I had to or did


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## losttheplot

Could I sue a publican for supplying me with enough alcohol to put me over the legal limit to drive.

Unless the bank mislead you into getting a mortgage I doubt it. Could a a bank sue for "unrealistic borrowing"


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## rsta

Thanks everyone for all your replies.  Tbh, I think if someone is in trouble with their mortgage repayments, the last thing they would need would be the added expense and stress of a lawsuit. 

And to the people who jumped down my neck, my question was hypothetical and I am not intending to sue my mortgage lender. Which I had already said.. Ok, so just chill out.

Maybe we should sue the broker instead! 
(And by the way I'm just kidding before anyone jumps down my neck again..)


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## Mrs Vimes

losttheplot said:


> Could I sue a publican for supplying me with enough alcohol to put me over the legal limit to drive.



No, you can't


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## so-crates

To answer your question literally - you can always sue. The real question would be whether you would have any success if you did. The answer to that is probably "no" or perhaps if you were able to demonstrate that they co-erced or encouraged you against your better judgement to take a mortgage then a share of the responsibility might be found to lie with them. So the answer is probably "no".


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## Time

Until someone tries, we just won't know for sure.


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## southside100

a high percentage of mortgages would not have been approved up front, mortgage brokers and bank staff were putting huge pressure on underwriters to approve loans that maybe shouldn't have been approved at all, as they were trying to achieve targets set out for them by the bank and receiving huge bonuses in return for hitting those targets, so I don't agree that it is all one sided. One example would be if your Broker or Mortgage Representative encouraged you to say that you were renting out a room to increase your monthly income so you would be approved for a bigger loan, then you may have a case.


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## elcato

> One example would be if your Broker or Mortgage Representative  encouraged you to say that you were renting out a room to increase your  monthly income so you would be approved for a bigger loan, then you may  have a case.


So you lied to the bank. I can see that going only one way.


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## mprsv1000

In Spain recently a Judge ruled in favour of the lendee when bank sold house fofr half loan value and sought to get balance from lendee, Judge stated reason was wreckless lending by the bank and as such should take the loss themselves.... mabye if this was the norm instead of exception the whole lending mess and and property bubble may have been avoided.

When bankers are receiving payouts on money loaned out (and not yet paid back .......) then a culture of wreckless lending is promoted and to say only one party is at fauly (the lendee) is not just morally questionable but in plain terms feckin total stupidity IMO


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## RAMS

*And to the people who jumped down my neck, my question was hypothetical and I am not*

I think it might be possible to sue a lender for reckless lending. It just never has been tested in a Court. A bank employee is financially literate and, for example, if he/she sells a financial product to a 'non-financially literate' person and had that person sign a contract for a mortgage that is say 10 times a person's salary, sure the bank could be liable. MPsox has a point (The Financial Services Ombudsman report has plentty of examples where  banks sold people financial products that were not suitable for their  needs. Why should a mortgage be any different?) Maybe people should get together and have this tested in Court. I'm sure the banks are hoping nobody does, while they get bail out after bail out after hiding the huge holes in their own balance sheets.


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## Bronte

Unlike most other financial products mortgages are different in that the borrower has to use a solicitor and thereby gets independent legal advise on the mortgage. 

Interestingly most of the people with mortgages on AAM who believe the lending was unfair just happen to be the people who overpaid for their properties and are now struggling with the payments. Whether that was stupidity, naivety or greed time will tell. 

Even if a case were to go to a court who would actually win. Nobody. Because then along with the rest of us already paying for the bad decisions made by the banks we'd all as tax payers have to now pay the further bank losses. That would be the ultimate conclusion to such a case. 

Whether one took part in the tiger or not everybody is paying for the party. Bankers, politicians, developers, lawyers and regulators were all wrong but so too were many borrowers. Some are more culpable than others. But no matter which way one puts the blame it makes not one bit of difference because at the end of the day the only people who will pay for it are the taxpayers.

Rsta, the OP on this thread has not answered the question: 'Why did she take out a mortgage that she struggled to pay for from day one'.  Not attacking her by asking this, but it would be very interested if she could give an honest answer to her motives and thinking at the time she took out the mortgage and indeed to the conversations she had recently with her friends in the same situation.   It's very easy for them all to blame the banks for giving them the money but until these same people acknowledge their own culpability in the mess we will never move on and grow up.


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## ali

> Unlike most other financial products mortgages are different in that the borrower has to use a solicitor and thereby gets independent legal advise on the mortgage.


 
I've never bought or sold a property where the solicitor has advised me about the mortgage. S/He simply did the conveyancing.

A.


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## oldnick

Bronte wonders whther the actions of those borrowers was "stupidity,naivety or greed."

I have argued in several threads that it was also because of heavy pressure from all sort of expert sources - bankers, mortgage advisors, the government.

Banks giving 100% mortgages based on values that they, as experts, should have had a better idea of than a young couple.  No real checks on peoples incomes -or even if they did check  they'd offer several times the level of income.

. I had twenty  people in their twenties and thirties working for me ten years ago then. The pressure from banks, govenrment, media and peers to buy,buy,buy was intense. (There weren't many David McWilliams around  and if there were they were mocked -"they should commit suicide" said Bertie.) 
I suggest that the OP may have been one of those tens of thousands of people who
were given the wrong advice after a lot of pressure.


You can say that they should have known better than to listen to the banks, govnt etc -but society doesnt work like that. We're all influenced by norms of society - and the norm in 2001-2006 was "buy now whatever happens and here's loads of money".

So, calling those borrowers "stupid,greedy or naive" seems somewhat harsh.

Maybe "naive" only in the sense they were not experts -and that's who the borrowers turned to - the experts, the very people who are unpunished by their actions whilst still squeezing the people they misled.

Incidentally, I don't think that most borrowers feel they are blameless. I know many of my ex-staff who DO feel they were silly/guilty-they're kicking themselves.

 Frankly, I don't think those borrowers should feel guilty.
 I wouldn't blame someone who goes to a doctor, is prescribed the wrong medicine yet sees the doctor unpunished(indeed richly rewarded) and, even worse, the patient still has to swallow the wrong medicine.

The doctor, the medical expert, would be sued - why then  not the financial expert ?


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## dahamsta

As ali says, the solicitor argument is a red herring. I talked to 4 lenders before settling on one when I bought my house, and there was no involvement by a solicitor; nor was I asked or advised to consult one, or an independent financial advisor. Ditto when I did the deal. The solicitor is only required for conveyancing.

While I think there was a certain element of naivete on the part of borrowers, the fact remains that lenders are experts and borrowers generally aren't, so they have a major responsibility. The way forward is to require independent advice, but that will lead to other problems, such as higher costs for borrowers, and corruption.

(I'm not in trouble with my mortgage, I bought recently and continue to pay my full monthly payment. Another right-wing red herring.)


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## losttheplot

To avoid repeating these mistakes, personal finance should be included in the school curriculum (long time since I was at school but it wasn't on it when I was there). The first time I bought a house, I asked many work colleagues what mortgage rate they were on, none of them knew. They could all tell me what the monthly repayments were, but not the term or the interest rate. They just knew it cost X amount per month, I earn Y amount, Y is greater than X: therefore I can afford it.

Speaking to a friend who was in the motor trade and he said the same was true for car finance. Very few people would ask the APR or term of the finance, just how much a week - yep, I can afford that. These would be the same people that would spend hours going from shop to shop to save a few pence on weekly shopping but give no thought to how much they could save on the bigger things.

As consumers, we're generally naive and lazy, is it any wonder we've been exploited by the banks (all legally though).


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## marksa

losttheplot said:


> exploited by the banks (all legally though).


 
by banks giving out money way too cheap, where they were not putting money aside for the rainy day (recession etc). I blame Bank of Scotland (and latterly NIB with its 0.50% LTV product) who came in and agressively lent at very low margins, and to scary multiples of salary in order to acquire market share at any price. The dumb local banks just followed suit to compete. All on the premise that property prices never go down - how wrong was that!

Now all this is considered to have been good for consumers, but only in the short term, because we are now all as taxpayers paying for it even if one does not have a mortgage.


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## losttheplot

"Enjoy borrowing responsibly"... we just weren't mature enough for all that cheap money, like children let loose in a sweet shop.


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## RAMS

*And to the people who jumped down my neck, my question was hypothetical and I am not intending to sue my mortgage lender.*

This is exactly what the Irish Property Council is advocating at the moment, i.e. suing the banks, government, regulator for 'reckless lending'. A spokesman was on the lunchtime news on RTE 1 today - didn't get his name. They are actually looking for people to contact them with a view to taking a class action suit on behalf of a number of borrowers. Their arguement is that many borrowers are likely to be declared bankrupt for years while the banks, regulator and government ministers responsible for the debacle get off scott free. Could be an interesting case!


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## Sunny

RAMS said:


> *And to the people who jumped down my neck, my question was hypothetical and I am not intending to sue my mortgage lender.*
> 
> This is exactly what the Irish Property Council is advocating at the moment, i.e. suing the banks, government, regulator for 'reckless lending'. A spokesman was on the lunchtime news on RTE 1 today - didn't get his name. They are actually looking for people to contact them with a view to taking a class action suit on behalf of a number of borrowers. Their arguement is that many borrowers are likely to be declared bankrupt for years while the banks, regulator and government ministers responsible for the debacle get off scott free. Could be an interesting case!


 
It's not really. It's a cheap publicity stunt. What do the Irish Property Council care about ordinary householders considering it was their members who built and sold the overpriced junk in the first place.


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## dahamsta

Didn't think you /could/ take a class action suit in Ireland.


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## so-crates

Ultimately this argument that borrowers were at the mercy of the banks and advisors when it came to deciding that they could afford to purchase the mortgage they opted for is pointless. They are adults and their ignorance is their own to deal with, they cannot present naivete as an argument that justifies a payout by the bank. They weren't deceived by the bank. They were frequently complicit with the bank. The number of times I heard people's ruminations on how to get a mortgage for more than the bank was willing to lend them at the time was frightening. The number of people who massaged their presentation of their financial well-being in order to obtain the desired mortgage was disturbing. 
How many people now looking to blame somebody else for a mortgage they took out expended time, effort and money on presenting a flattering picture of their financial health? I'd be inclined to say all of them. 
How many of them still have not admitted to the unpalatable truth that they cheated themselves when they massaged their figures? Cynically, I'd be inclined to guess an unhealthy majority.
I do not mean to imply that all those in straitened circumstances did so. There is a considerable difference between finding yourself unemployed and finding yourself sitting with a severely depreciated asset on one hand and a large liability on the other that no longer is covered by the value YOU ascribed to the asset. The first person deserves compassion, the second deserves the lesson. Both may deserve some support.
As I already said, you can always sue if you wish but a couple of cogent points to consider. 
1) Is the bank/broker the only party liable? Do you have any liability at all for your behaviour at the time?
2) If you are going to sue you should only sue where there is money available to pay out for you - so suing a bankrupt bank may simply be a fools errand.


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## Complainer

losttheplot said:


> Could I sue a publican for supplying me with enough alcohol to put me over the legal limit to drive.





Mrs Vimes said:


> No, you can't


But it is against the law for a publican to sell booze to someone who is drunk.


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## Bronte

oldnick said:


> I have argued in several threads that it was also because of heavy pressure from all sort of expert sources - bankers, mortgage advisors, the government.


 
At the end of the day the borrower went into a bank, they looked at a property that was too costly, they didn't do their own sums, they didn't look at a scenario of stress testing to see if they could cope with interest rate rises, they didn't think about what they would do if they lost a job. Very simple basics. In the case of the OP they actually admit that they couldn't afford the mortgage from day one, what on earth were they thinking of?

And Cruzer, I've yet to find a person who was told by Bertie or Brian to buy a home or who listened to an economist.  Anyone who listened to economists will understand that for every economist saying one thing there is another saying the opposite.  People believe what they want to believe.

Before everyone jumps down my throat, there is no one more angry at bankers, regulators et al then myself.


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## RAMS

> What do the Irish Property Council care about ordinary householders  considering it was their members who built and sold the overpriced junk  in the first place.


If you look at their web site you will see that they represent investors as well - a lot of whom are ordinary householders with one investment property.


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## so-crates

Cruzer said:


> There are so many that support the banks & blame the buyers on this forum it amazes me.


 
What amazes me is the number of people who seem to want to be treated almost as children, despite being able to afford their mortgage they want to lash out and blame others for the fact they have invested that borrowed money in a property that is not now saleable for the amount of the mortgage. The value of your investment may go down as well as up - it applies to everything you may invest in. They gambled. The banks gambled. *Both* are now paying the consequences. 
I have every sympathy for those in straitened circumstances, for those struggling to decide between heating and eating, for those who have truly found the burden of paying intolerable. The behaviour of lenders specifically and society in general to those will be the measure of our character - I am not sure that we are measuring up the way we ought to. I have little sympathy for those béal bochts who plaintively whine that it is somebody else's fault that they gambled borrowed money on a clearly over-inflated property market. (And I am aware that there is an overlap!)



Cruzer said:


> Either they didn't buy a house between 2004 and 2009 or they are students/renters/stay at homes praying for a total meltdown in property prices. Maybe they bought a house in 1991 and have it paid off.


 
A rather sweeping statement and more than a little ludicruous. I did buy a house between 2004 and 2009 but I bought sensibly. I saved for my deposit. I looked at my budget myself to see what I could afford and I opted for a mortgage for less than they were willing to offer. I chose the property based on criteria that suited me (one of my criteria was a deep aversion to paying over the odds). I didn't look for a mortgage that was more than three times my salary. I didn't fudge or massage any figures on my application. As a result and because I have not been so unfortunate as to suffer unemployment I can still comfortably afford my mortgage. I am probably somewhat in negative equity, but I was neither surprised nor inclined to blame anyone else for that.



Cruzer said:


> Yes the borrower and bank are both complicit however the borrower carries the debt forever. Non recourse or sharing of the debt is the only answer.


 
The only answer to what exactly? Non-recourse loans are hardly a panacea. On what basis to you make such a broad statement? What are the economic benefits of such a radical change in loan agreements? What are the possible consequences? What exactly do you hope to solve with this approach? I'd need more than your bald assertion to be convinced of the merit of this approach.



Cruzer said:


> The other way of sorting this is a one year bankruptcy, at least until we free the people of this debt burden created by Banks / Politicians & Civil Servant idiots that were asleep at the wheel.


 
Ah something we can agree on! Reform of bankruptcy laws in this state are long overdue. However, I notice once again that you seem to think that the borrowers bear no responsibility for their borrowing. Adults have responsibility to manage their own affairs, assuming they are compos mentis of course. Why do you wish to infantilise a whole generation of Irish people by patting them on the head and saying it is alright, it isn't your fault, they made you borrow so you run along and play now. Being responsible isn't necessarily easy but it is necessary - who wants a nanny state? And if as you say "Banks/Politicians and Civil Servant idiots" were asleep at the wheel what about the fools that repeatedly elected a government which was careening down a path clearly marked "DANGER". Bubbles aren't a new phenomenon, they are depressingly regular. What is also depressingly regular is how people react to them, they always assume this bubble will be different because....
We elect our goverment. In 2007 we elected pretty much so the same crew we had already on the basis of a stupidly generous budget, and daft promises from a craven bunch of nest-featherers. Hopefully now we will have learned the lesson that when a politician claims he has experience, what he means is that he has experience in screwing the system for as much cash as he can.



Cruzer said:


> I sick of seeing trolls on this forum point the finger of blame at those who borrowed in good faith, listened to Bank Economists/Bertie/Brian and invested in their future and the economy by purchasing a home only to find the whole thing was a giant pyramid scheme.


 
I'm heartily sick of the blame game - it benefits no-one, I'd rather just get the country back working. I am even sicker of the attitude that it must be someone elses fault.


----------



## RAMS

> They gambled. The banks gambled. *Both* are now paying the consequences.


Not true. Banks are not paying, only taxpayers and borrowers are paying.

Nobody but nobody  is saying borrowers arent culpaple. They are. But unfinancially  literate people relied on the 'financially literate' bankers who  were literally throwing money at them. Most people wouldn't understand  the first page of a mortgage agreement. Bully for you that is obviously  not one of the masses who were not proficient in financial accounting and economics to have made an informed decision - that is an informed decision against the majority opinion at the time. We all know the famous quote from Bertie about naysayers. Only David McWilliams was saying it was a house of cards - nobody else did until the cracks started to appear. Not even one newspaper as the revenues from property advertising were too lucrative. The Financial Services Ombudsman's office is full of cases where people were sold financial products that were not suitable for their needs. Mortgages are no different.


----------



## Nutso

The system in the US is a better system.  Banks are also taking a risk on the value of the loan they give, because if the borrower becomes unable to pay they can hand the keys back.

Maybe if we had a similar system here, banks would have been more careful about the values they placed on property and the loans they gave.


----------



## Sunny

Nutso said:


> The system in the US is a better system. Banks are also taking a risk on the value of the loan they give, because if the borrower becomes unable to pay they can hand the keys back.
> 
> Maybe if we had a similar system here, banks would have been more careful about the values they placed on property and the loans they gave.


 
Didn't really work in the States did it!


----------



## so-crates

RAMS said:


> Not true. Banks are not paying, only taxpayers and borrowers are paying.


 
How do you figure that? Because they aren't paying your mortgage? Let's see - half of the banks have now been "bought" by the state, their share values are at rock-bottom prices or they are no longer listed. Oh I have no sympathy for them, I would like to see some people end up in prison having been stripped of whatever assets they have tried to salt away but it is a silly argument to stamp your foot and demand someone else pay too because you lost the gamble. Where a person has a genuine case that they cannot reasonably pay that is a different matter.



RAMS said:


> Nobody but nobody is saying borrowers arent culpaple. They are. But unfinancially literate people relied on the 'financially literate' bankers who were literally throwing money at them. Most people wouldn't understand the first page of a mortgage agreement.


 
I am assuming you mean "financially illiterate" as the other phrase makes no sense. Assuming that then I still have to say, it is their life they are gambling with. That they themselves did not see fit to equip themselves with the facts and instead opted to lazily rely on your so-called experts who clearly had a vested interest in their taking out the loan points to their culpability in their own situation. People choose risks poorly. Usually because they are either poor at gauging the relative risk of two things or they are lazy about assessing the risk and use short-hand indicators instead. Even having assessed risks properly people are apt to end up the "victims" of herd mentality - none of that diminishes their own responsibility for their own actions. It certainly comes across to me from the béal bocht attitude that some people have adopted that they do not  accept their own responsibility in this mess. It isn't defending the banks to query why people think that everyone else should be made to pay for the mess they have got themselves into. Because ultimately, let us not forget - these banks do not have any money and are borrowing from us to fund this debacle. I pay my debts - why should I pay others? 



RAMS said:


> Bully for you that is obviously not one of the masses who were not proficient in financial accounting and economics to have made an informed decision - that is an informed decision against the majority opinion at the time. We all know the famous quote from Bertie about naysayers. Only David McWilliams was saying it was a house of cards - nobody else did until the cracks started to appear. Not even one newspaper as the revenues from property advertising were too lucrative.


 
I am no financial expert or wizard. What I am is a person that always reads what is put in front of them. I don't sign something I don't understand and I cannot fathom why anyone would think that other people should be minding them all the time. I make mistakes and have paid for those mistakes but I acknowledge them as my mistakes and I learn from them. Perhaps that is why I was more cautious when it came to taking on such an enormous debt.



RAMS said:


> The Financial Services Ombudsman's office is full of cases where people were sold financial products that were not suitable for their needs. Mortgages are no different.


 
Interesting idea - and mortgages are no different, they are a financial product. But I suspect the number of mortgages mis-sold is a tiny proportion - same as other financial products.


----------



## Bronte

so-crates said:


> I'm heartily sick of the blame game - it benefits no-one, I'd rather just get the country back working. I am even sicker of the attitude that it must be someone elses fault.


 
That whole post is great socrates.  

I'm sick of it, the blame game too.  Seems to me some people will never own up to their own culpability in the mess. 

In relation to debt forgiveness I'm all in favour of new bankruptcy rules.  But it won't solve the 'problem' that a lot of people have and that is the simple fact that they *can* afford their mortgages, they are in massive negative equity, and that it will take them 30 years maybe to sort themselves out.  Instead of focusing on the blame game, they should focus on doing something for themselves about that.  Hard choices will have to be made.  No government or bank is going to sort out their financial affairs.  There is no pill called 'debt forgiveness' or 'mis-sold mortgage' that wipes away debt.  

Cruzer I bought an investment property between 2004 and 2009.  It's no doubt in massive negative equity and I've 'lost' thousands.  You've now two people on this thread who have already proved that part of your theory wrong.  

Rams you don't have to be financial literate to know that if you borrow x and the repayments are y that you must be able to pay y.  Reading a mortgage document while desirable is not required for that math basic.


----------



## tvman

RAMS said:


> Not true. Banks are not paying, only taxpayers and borrowers are paying.



Companies, including banks, are simply vehicles to maximise the wealth of shareholders. Shareholders of the Irish banks have lost everything, literally everything in the case of Anglo, 99% in the case of AIB and BOI. In what sense can these companies be said not to have paid a price.


----------



## Mpsox

Bronte said:


> I'm sick of it, the blame game too. Seems to me some people will never own up to their own culpability in the mess.


 
I agree with you in principle, and up to a point, but I don't think the answer is as black and white as you make it out to be. After all, on an annual basis, the Financial Ombudsman will make rulings against the banks for selling unsuitable investment products to people, why shouldn't mortgages be any different?

One of the reposesion cases in court this week involved a 49 yr old person who had been awarded a 30 year mortgage. There is a strong arguement for saying that the bank in question should never have leant her the money on these terms and should share in the responsibility for potentially allowing a mortgage to run until someone was 79 years old.

Bank of Ireland were already held liable in 2010 for mis-selling an endowment mortgage. UK banks have been held liable for similar issues in the last decade, + for mis-selling insurance on mortgage products. Therefore there is some precedent.

Likewise, if a mortgage holder could prove, that they were advised by a broker or bank manager to pad their salary/income figures, some liability could lie there also.

The reality is that for the majority of people, they were either naive or careless and shouldn't have grounds for a case against a bank. In particuler, that applies to investment mortgages and I have no sympathy for anyone who took out 100% interest only mortgages on investment property. they simply got carried away. However, and on a case by case basis, I do believe some cases may occur in the near future where a lender and/or broker will have to share responsibility


----------



## kickstart

RAMS said:


> The Financial Services Ombudsman's office is full of cases where people were sold financial products that were not suitable for their needs. Mortgages are no different.



Back when the FSO used to publish case histories, I used to read them all. I can't say I remember many cases of mis-sold mortgages. I think there were a few endowment-style cases brought up, but his terms or reference didn't allow him to rule on them as they were too old.  For regular mortgages, I don't think you could class it as mis-selling if the buyer could afford the mortgage at the time it was taken out. For those mortgage contracts where the person taking it out was clearly unable to pay it from day one, then I think it should be classed as mis-sold. Unfortunately, I don't think the high court agrees with me.


----------



## yram

I really thought hard about 3-4 years ago about buying a house. But I knew, in reality, that if anything ever happened job/economy-wise, I would be screwed. Fine, I dont "own" a property, but Ill live.

Why did I know that, and others didnt?
I certainly dont have any third level education in business for me to realise that.
So why should people who are struggling to pay mortgages be treated as "ah the poor things"...they got themselves into this mess by greed. Pure greediness. Isnt that the (old) Irish way of thinking? Get yourself into a fine old mess and blame everyone else?


----------



## dahamsta

Anyone that bought without thinking ahead 3-4 years ago deserves what they got. I think people back further are in worse shape and more entitled.

The people crying for the heads of posters saying _"x is 100% wrong"_ or _"y is 100% wrong"_ must be illiterate or special, because I haven't seen a single person say that.


----------



## Bronte

Mpsox said:


> One of the reposesion cases in court this week involved a 49 yr old person who had been awarded a 30 year mortgage. There is a strong arguement for saying that the bank in question should never have leant her the money on these terms and should share in the responsibility for potentially allowing a mortgage to run until someone was 79 years old.


 
Well let's take that case.  What was the 49 year old thinking of?


----------



## dahamsta

Bronte said:


> Well let's take that case.  What was the 49 year old thinking of?



What was the bank thinking of?


----------



## Time

Quite. The banks need to be brought to book about their dodgy lending practices.


----------



## orka

Bronte said:


> Well let's take that case. What was the 49 year old thinking of?


"Yay, fooled the bank into lending me the money!  A 30 year mortgage will be cheaper annually leaving me spare money to live the life I deserve because I'm worth it.  I don't expect to be paying this back when I'm 79; when I get to 65, my house will be worth 4 billion euros so I'll sell it, repay the mortgage and buy a smaller house with the enormous profit I will have made"





dahamsta said:


> What was the bank thinking of?


"Yay - another mortgage sold! A longer mortgage prolongs interest payments for us as less capital is paid back each year.  We don't expect this 49-year old to still be paying off his mortgage when he's 79; when he gets to 65, his house will be worth 4 billion euros and he will repay his mortgage then"


----------



## dahamsta

Sounds about right, nonsense on both fronts. Which is my point: people here are trying to say that _other people_ are trying to say that one or the other are to blame. Both assertions are wrong, even the imaginary one.


----------



## DTJAE

*Value YOU ascribed to the asset?????????*



so-crates said:


> Ultimately this argument that borrowers were at the mercy of the banks and advisors when it came to deciding that they could afford to purchase the mortgage they opted for is pointless. They are adults and their ignorance is their own to deal with, they cannot present naivete as an argument that justifies a payout by the bank. They weren't deceived by the bank. They were frequently complicit with the bank. The number of times I heard people's ruminations on how to get a mortgage for more than the bank was willing to lend them at the time was frightening. The number of people who massaged their presentation of their financial well-being in order to obtain the desired mortgage was disturbing.
> How many people now looking to blame somebody else for a mortgage they took out expended time, effort and money on presenting a flattering picture of their financial health? I'd be inclined to say all of them.
> How many of them still have not admitted to the unpalatable truth that they cheated themselves when they massaged their figures? Cynically, I'd be inclined to guess an unhealthy majority.
> I do not mean to imply that all those in straitened circumstances did so. There is a considerable difference between finding yourself unemployed and finding yourself sitting with a severely depreciated asset on one hand and a large liability on the other that no longer is covered by the value YOU ascribed to the asset. The first person deserves compassion, the second deserves the lesson. Both may deserve some support.
> As I already said, you can always sue if you wish but a couple of cogent points to consider.
> 1) Is the bank/broker the only party liable? Do you have any liability at all for your behaviour at the time?
> 2) If you are going to sue you should only sue where there is money available to pay out for you - so suing a bankrupt bank may simply be a fools errand.


 
You are obviously not familiar with the mortgage lending game?? You don't put a value on your house, the bank send out an independant valuer to value you home for them....So now who's been over pricing houses as well as the auctioneers???? One other poster stated that the irish property council were implicated in this also. You do sound like someone who either works in a bank, for a bank or is in the lending game, either way i do believe that the banks and the brokers are more to blame than the borrower, like it has been said several times already, these guys are supposed to be the experts and get paid exteremly well for being so (just like our corrupt politicians and look what happend to FF) Why can't the same game be played with the bankers??

I assume your doctor is qualified to ensure the best health service for you and your neighbourhood??? And if that wasn't the case and he recklessly or unprofessionally sold you the wrong health product or medication or prescribed an expensive medication you did not require to increase his precriptions for the chemists he would be held accountalbe regardless of what you told him your symptoms were, he is required to investigate to ensure the product is suitable and will not affect you in a negative manner. THATS A PROFESSIONAL/EXPERT


----------



## Greensquare

I don't work for any bank/lender/broker etc.
In 2005 I bought an investment property which I didn't need. It was my was of "getting ahead" in 10 years time. "I'll sell it and make a good profit", was my wisdom at the time. At the time the broker told me he would get the value of the house bumped up by 15% for the paperwork, so that he could then give me 90% of the higher value, which in reality would be 100% mortgage of the cost price. He knew it was wrong, & I certainly knew it was wrong, but I went along with it.  
This property has roughly halved in value by now.
Who's fault is it? Mine & mine alone. I knew when I signed that mortgage that it was a risk. It has backfired. Its on my head to deal with it.

If you treat people in society like poor victims, they will behave like that. People need to take responsiblity for their own actions.


----------



## Commercial

I bought a commercial property 6 years ago, which was well located and had a good tenant in it. I was on €60k a year in my job and an assistant manager. I have since seen the report that the commercial lending manager put to their underwriters for my case and in it, they stated that I was a manager on  €80k. This was in order for me to get the loan facility through.
I went through no broker to organise the loan facility, I provided no documents stating these incorrect facts and I was unaware that this was put forward as part of my case. I would not have got the loan facility if the correct facts were presented.
I am not looking to sue anyone or run from my repsonsibilities, but just wondering what people think of my case.
It seems the commercial lending manager had a target to reach and would do whatever he could to get the money out


----------



## NorfBank

Greensquare said:


> At the time the broker told me he would get the value of the house bumped up by 15% for the paperwork, so that he could then give me 90% of the higher value, which in reality would be 100% mortgage of the cost price.



So what you're saying is the contract price/price you paid for the property was 100% and the valuation was 115% and the bank gave you 90% of the valuation price?


----------



## wbbs

Strange the underwriters did not want to see proof of the 80k.   Any underwriter i ever dealt with wanted to see hard evidence.   Were there bonuses, overtime, rental, anything that could have increased the 60k


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## Time

Hard evidence can be faked. During the boom blank P60 forms were valuable documents.


----------



## Greensquare

NorfBank said:


> So what you're saying is the contract price/price you paid for the property was 100% and the valuation was 115% and the bank gave you 90% of the valuation price?


 
Yeah. I didn't have the money for a deposit at the time so he said, "Right, lets assume the value of the property has gone up since you agreed the price. I'll value it high enough so that 90% of that increased value will give you 100% of the purchase price."
I'd be fairly financially literate, and I asked if this was ok to do, and he just smirked and said, "thats how things are done". 
I knew at the time is was wrong, but I, like many others, was caught up in the frenzy that meant that if you didn't have a 2nd property, you were lazy/an idiot/narrow minded/overly cautious/lacking ambition (take your pick).
So my property with a 100% mortgage has halved in value since, leaving me with a fairly sizeable negative equity black hole.
But my point still stands, I made the final decision, so the consequences are mine to deal with it.


----------



## wbbs

I know they could be fake and many were but OP made it sound like underwriters took managers word for it without any evidence, fake or otherwise.


----------



## toby2449

rsta said:


> Just wondering if anyone has ever sued their mortgage lender?
> 
> My mortgage was granted about 4 years ago and even back then I was struggling to pay it with a full weeks wages.
> 
> Is it possible to sue a mortgage lender for approving a loan that I would never be able to manage?
> 
> Thanks


 
Absolutley no chance of suing the mortgage provider. You knew your outgoings & still went ahead with the purchase, although you knew you couldn't afford it. Being brutaklly honest there's no-one to blame but yourself. Too many people blamed the banks for lending too much, maybe people should sit up & take note that they borrowed too much!


----------



## Gekko

toby2449 said:


> Absolutley no chance of suing the mortgage provider


 
I don't see how you can be that definitive.

Surely the salient point is whether the lending institution (or broker if relevant) had a duty of care to the borrower? I would have thought that this question has yet to be considered by the Courts.


----------



## Time

Indeed. That has not been tested yet.


----------



## JoeB

It would all get very mired. The regulator, who clearly and specifically has a duty of care to consumers was also aware and did nothing, .. and is un-prosecutable I'd imagine.

If he was un-aware he was incompetent.. at a minimum he should have taken pro-active action in regards to rumours which must have been massively widespread, that income multiples were being ignored or massaged, and that the rules, as is common in Ireland, were being ignored or stretched beyond credibility.

From a technical viewpoint he doesn't seem to have protected consumers in relation to interest-only, or 100% mortgages,.. which don't appear to be recommended internationally, as they encourage over borrowing.

So the banks can legitimely say that they were acting with the implicit approval of the Irish Regulator, and thus with the approval of the Irish Government.

I think a case will be taken, and some could win, particularily in relation to people over 50 getting long mortgages past the retirement age... but also people having multiple mortgages where the repayment capacity is mainly based on rental and income gained from mortgaged properties.


----------



## Commercial

I certainly did not fake my P60. I did not make that money on bonuses.  It was my salary and that was it.
The credit committee took the managers word for it as if I was a manager in my job, I would have been on €80k.
No evidence was requested at all


----------



## AlbacoreA

I think there's an argument that the regulator was set up by Bertie, to keep things at a distance. A distance that then was maintained. To what end you can speculate all day.


----------



## so-crates

DTJAE said:


> You are obviously not familiar with the mortgage lending game?? You don't put a value on your house, the bank send out an independant valuer to value you home for them....So now who's been over pricing houses as well as the auctioneers????


 
Actually you do put a value on it, when you agree to pay a price. It is immaterial whether you ask someone else's opinion beforehand or agree with your lender to accept their valuation, at the end of the day it is your name on the contract. Again we circle back to this notion that you are an innocent abroad, a lamb among wolves, at the mercy of all takers... the only way to work against that is to take responsibility for your actions.



DTJAE said:


> You do sound like someone who either works in a bank, for a bank or is in the lending game, either way i do believe that the banks and the brokers are more to blame than the borrower, like it has been said several times already, these guys are supposed to be the experts and get paid exteremly well for being so (just like our corrupt politicians and look what happend to FF) Why can't the same game be played with the bankers??


Well sorry to disappoint you, I don't work in finance in any professional capacity - I only deal with my own plate, my own finances. What I do though is I try not to be passive about my finances, I try to ensure that my decisions have some merit and I always take the consequences of my decisions, good or bad.



DTJAE said:


> I assume your doctor is qualified to ensure the best health service for you and your neighbourhood??? And if that wasn't the case and he recklessly or unprofessionally sold you the wrong health product or medication or prescribed an expensive medication you did not require to increase his precriptions for the chemists he would be held accountalbe regardless of what you told him your symptoms were, he is required to investigate to ensure the product is suitable and will not affect you in a negative manner. THATS A PROFESSIONAL/EXPERT


Not entirely sure what you are trying to get at here but I am assuming you are comparing a GP to a financial advisor? The professional restrictions and the entry requirements for a GP bear no relation to those for a financial advisor so as a comparison it is ill-founded. Are you trying to suggest that not paying off your debts because you have suddenly awoken to the fact that you owe more than you want to afford (by your own hand and agency) is the same as a potentially fatal misdiagnosis? A more likely issue with a GP is a prediliction for prescribing expensive branded concoctions rather than generic - but that is a totally different issue.


----------



## netz

rsta said:


> My mortgage loan amount approved and granted was 7 times my annual salary..!



We got approved for 2 mortgages when I was on long term social welfare,  and my husband was self employed. We actually had no definite income, and we got approved for a combined mortgage of nearly 400,000 - that was 5 years ago. Half of this was to fund a second home in the country, which never got off the ground,  but still got 230,000 of a mortgage on our home which is now worth 130k. We thank our lucky stars cause at the time we were approved for 1 million euros to buy investment properties - I wouldnt have ever slept owing that much money. I think the bank was very reckless in lending us 230k for this house, never mind the 1 million approval to buy investment houses, but we were as reckless in accepting the mortgage. I think we all got caught up in the hype that was the boom, but banks were only partially responsible. It was a mortgage broker who got this deal for us, and he filled in all the right figures to ensure we were passed. All we had to do was sign - the rest is history. But we were just as negligent as the banks in agreeing to this ridiculous loan, so we just have to live with it and learn from it.


----------



## blackgold

Banks were meant to be responsible in their lending..if they lent to people who had no hope of repaying then we can only blame the "professionals"..ie the banks.
When the banks were so anxious to lend money they rarely seemed to take into account what people had after tax to repay their mortgage and live..so yes I would call that irresponsible on their part.
If a parent gives a child too many sweets and the child becomes sick from eating them the parent is at fault as they should have known better...apply this to banks and put them in the position of parents..
I wish people would stop making excuses for the banks and saying that we(the general public) should have been more responsible ..so maybe we should but if you have a lending institution (who should have known better) telling you that you can afford this loan is it any wonder so many people believed them?
How may of us knew so much about finance before we began to lose money in our take home pay, or lose our jobs ? 
I am sure many of us have learned some lessons ...and by the way we have contributed many billions to the banks from tax payers money ..what else do they want..blood?


----------



## so-crates

Banks do not owe you the duty of care that your parents owed you when you were a small child. Now that you are an adult do you still expect your parents to dole out the sweeties? Only adults can make a contract, and as adults they must take their own responsibility.


----------



## Jim2007

blackgold said:


> Banks were meant to be responsible in their lending..if they lent to people who had no hope of repaying then we can only blame the "professionals"..ie the banks.



Reality check - banks are a business just like any other and when they screw up they go to the wall, just like any other business, there is nothing new it this.  This is exactly what happened to the Irish banks, they were badly managed and the owners, the shareholders, paid the price - they lost their investment!  The banks now belong to the state and any benefit that will accrue from them will fall to the public exchequer, not the shareholders.

There is no doubt that many people have learned a very hard less about personal responsibility, but at the end of the day society functions on the basis that adults are able to make decisions in respect of their own well being.  And if we move away from that idea where do we start and where do we stop?

I do believe that one great failing in our education system both here and in Switzerland, where I live, is that we fail to teach people the basic skills of person finance.  Between the ages of 13 and 18, I think everyone should learn the basics of budgeting, consumer credit, insurance and so on, so that when they go into the world they have some idea of how it all works, but that is a discussion for another day.

Jim.


----------



## steevo51

It's all very well blaming the banks but at the end of the day you cut your own cloth. I would love to eat in Shanahans every day and drive a 5 series but on my wages I can't afford it.

Economies ALWAYS cycle, peaks and troughs and the number of people who decided to buy a house that was 40% more than it was two years earlier, if people waited the banks would have had nobody to lend to, the builders would have lowered their prices and you get a house at a more realistic price.

People are using their mistakes to blame everyone but themselves but it's not hard to do budget and if you don't know interest rates increase and economies slump then you must be living on another planet.

As for this nonsense regarding debt forgiveness and taking actions against banks because you stuck a mill stone around your neck is nothing but petulance. 

If people have their loans reduced or written off then what message does that send to people? Go get another huge loan and you have precidence to get it written off.


----------



## AlbacoreA

steevo51 said:


> ....If people have their loans reduced or written off then what message does that send to people? Go get another huge loan and you have precidence to get it written off.



+1 thats a major problem with it.


----------



## Greensquare

steevo51 said:


> It's all very well blaming the banks but at the end of the day you cut your own cloth. I would love to eat in Shanahans every day and drive a 5 series but on my wages I can't afford it.
> 
> Economies ALWAYS cycle, peaks and troughs and the number of people who decided to buy a house that was 40% more than it was two years earlier, if people waited the banks would have had nobody to lend to, the builders would have lowered their prices and you get a house at a more realistic price.
> 
> People are using their mistakes to blame everyone but themselves but it's not hard to do budget and if you don't know interest rates increase and economies slump then you must be living on another planet.
> 
> As for this nonsense regarding debt forgiveness and taking actions against banks because you stuck a mill stone around your neck is nothing but petulance.
> 
> If people have their loans reduced or written off then what message does that send to people? Go get another huge loan and you have precidence to get it written off.


 
Exactly my sentiments.
We all (myself included) have to learn the hard way that we have to take responsibility for our own decisions. We are not the victims of greedy banks. If anything, we are victims of our own stupidity or vanity.


----------



## Ryandd

It has been mentioned many times in previous comments that innocent people signed a two way contract when buying a house one which we were happy to sign, and I believe we kept our side of the contract in making payments but we didn't sign up for the corupt practices of the banks that now have us unemployed and unable to pay this debt so yes they need to start sharing the responsiblity of this contract.


----------



## honest

southside100 said:


> when someone took out their original mortgage they would have been stress tested to see if they could afford repayments with a 2% hike in interest rates.


 
Really? Was testing to meet loan repayments supposed to have been done?

What about a case where the lender lent so much money that the repayments (even at existing interest rates then, without the 2% hike you mention ) were well out of reach of the borrower?  For example, if a borrower was mentally unwell (and getting medical care for same) and borrowed so much from the bank that the repayments alone on this one loan were say €50,000 a year more than his total income, what then about the OP's question?  Could the mortgage lender be sued for unrealistic loan approval?   Surely the mortgage lender should - in its own interest, in the countries interest and in the interest of the lender - have checked to see if the loan was repayable?   If it neglected to evaluate an applicants ability to repay, should it not be held responsible....otherwise, why were some / most applicants evaluated on their ability to repay, and this person not?


----------



## Jim2007

honest said:


> Really? Was testing to meet loan repayments supposed to have been done?
> 
> What about a case where the lender lent so much money that the repayments (even at existing interest rates then, without the 2% hike you mention ) were well out of reach of the borrower?  For example, if a borrower was mentally unwell (and getting medical care for same) and borrowed so much from the bank that the repayments alone on this one loan were say €50,000 a year more than his total income, what then about the OP's question?  Could the mortgage lender be sued for unrealistic loan approval?   Surely the mortgage lender should - in its own interest, in the countries interest and in the interest of the lender - have checked to see if the loan was repayable?   If it neglected to evaluate an applicants ability to repay, should it not be held responsible....otherwise, why were some / most applicants evaluated on their ability to repay, and this person not?



It is up to the bank to decide whom they wish to lend money to and what criteria they use in reaching that decision.  So long as the comply with the law enforce at the time, then like every other business, their responsibility is to their shareholders end of story.  In this particular case the banks got it wrong and their shareholders got wiped out.  Whether that state should or should not have taken over the banks is a story for another day.

When it comes to signing a contract you are assumed to have the mental capacity to do so, unless you somehow demonstrate otherwise.  The fact that someone is suffering from say depression or something thing similar does not mean that they do not have the capacity to enter into a contract.  To somehow expect that the other party should be held responsible for assessing your mental capacity to enter into a contract is total nonsense!

Unfortunately, people are learning in a very painful way that their decisions have consequences and that in the real world they will be held accountable for those decisions.  The assumption that adults are capable of making decisions that are in their own best interests, is fundamental to the operation of society, what would we do otherwise, require everyone to get an assessment before they sign a contract, buy something in a shop, apply for a credit card.....


----------



## Bronte

honest said:


> For example, if a borrower borrowed so much from the bank that the repayments alone on this one loan were say €50,000 a year more than his total income, ?


 

This doesn't make sense.  Can you clarify please.


----------



## honest

Bronte said:


> This doesn't make sense. Can you clarify please.


 

Suppose a mortgage lender for whatever reason ( negligence, carelessness, corruption or greed for bonus ) lent so much money to a vulnerable person ( one on a prescription of serious drugs from psychiatrist ) that the mortgage repayments are 50,000 or 100,000 euro per year more than the borrowers income ever was ....could the mortgage lender be sued for unrealistic loan approval?


----------



## honest

Jim2007 said:


> It is up to the bank to decide whom they wish to lend money to and what criteria they use in reaching that decision.


 
supposing they lend without any criteria....what then?  Are they supposed to explain their criteria if they lent say double an independent valuation for the property , at say nearly 100 times someones income?  Can the banks extraordinary action be unexplainable to both shareholders and borrower? 




Jim2007 said:


> So long as the comply with the law enforce at the time,


 
is there a law saying they are supposed to evaluate a borrowers ability to meet repayments?  Morally of course the bank should, but is there a law?   I doubt it.




Jim2007 said:


> In this particular case the banks got it wrong and their shareholders got wiped out.


 
should the person in the bank therefore not be answerable to his/ her superiors and/or the shareholders?



Jim2007 said:


> people are learning in a very painful way that their decisions have consequences and that in the real world they will be held accountable for those decisions.


The borrower has learnt that over the past 8 years ( and has had his life destroyed), but should the bank employee who made the mistake not also discover that "their decisions have consequences and that in the real world they will be held accountable for those decisions". Should the bank not check to see if a borrower remotely has the ability to repay, or some plan or projections to repay the money? Surely the shareholders would expect that in any bank?


----------



## mandelbrot

Honest, why have you dug up an old thread from 2011 to continue a discussion on an issue you already started a specific thread for?

Maybe I'm just a cynic but I don't think you're entirely living up to your username in your description of the circumstances of this person being given their loan...

Do you know all of specific details of this alleged victim's loan application? Have you seen their application and all of the supporting documentation - eg. accountant's report, certified earnings, business plan / projections etc?

Or are you simply taking the word of someone who by your own assertion is not entirely mentally capable?


----------



## honest

mandelbrot said:


> Honest, why have you dug up an old thread


 
because I asked "Was testing to meet loan repayments supposed to have been done?" and the question the OP asked was
could the mortgage lender be sued for unrealistic loan approval? 



mandelbrot said:


> Do you know all of specific details of this alleged victim's loan application? Have you seen their application and all of the supporting documentation - eg. accountant's report, certified earnings, business plan / projections etc?


yes.  Certified earnings were much less than mortgage repayments.  There was however no business plan or projections.  The borrower was told the bank would evaluate if the mortgage was viable ("they were the experts") but it clearly did not.    




mandelbrot said:


> Or are you simply taking the word of someone who by your own assertion is not entirely mentally capable?


The documentation is immaculate and impressive, and the person is no longer on heavy medication / attending consultant psychiatrist. It will make an excellent test case. The question remains: is the lender supposed to evaluate the borrowers repayment ability ( for the mortgage amount ); and could the mortgage lender be sued for unrealistic loan approval?


----------



## Jim2007

honest said:


> The documentation is immaculate and impressive, and the person is no longer on heavy medication / attending consultant psychiatrist. It will make an excellent test case. The question remains: is the lender supposed to evaluate the borrowers repayment ability ( for the mortgage amount ); and could the mortgage lender be sued for unrealistic loan approval?



None of the concepts you have dreamed up exist in law!  If the borrower disclosed at the time that they were under the care of a psychiatrist there is a very slim chance that a court might declare the contract to be void, but that is an entirely different argument to the one you are making.


----------



## Bronte

Honest this is presumable the situation with the loans of the borrower you mentioned above, from your post on this thread:

http://www.askaboutmoney.com/showthread.php?t=172241&page=2


_To answer the OP's question, the most shameful lending I know of is a loan for 90 times the persons income. The borrowers own bank did not give him a loan at all when he asked for one, but another bank lent a 7 figure sum which was over 100% of the property cost, for 90 times his income. The borrower (who was medically unwell ) had closed down his old business / sold old stock etc, and the broker knew that, but the financial institution either did not know or did not care. Should'nt the financial institution have phoned up / checked to see if the borrower had the means to make 20 years of monthly repayments? The building society used a "buy-to-let" mortgage application form, for this 209 year old property! No proper valuation was done - the valuation which was done valued the property ( a derelect property of an eleventh of an acre in the west of Ireland ) at 17 million an acre! The nearest record within a 130 mile radius was a fraction of that. The borrowers life has been destroyed since, and his life made a hell. Sleepless nights, 7 years without holidays or new clothes, losing assets built up over many years, secondhand Santy toys, a miserable lifestyle and future etc_


----------



## Bronte

Honest - if the bank loaned at least 100% of the property cost, then the bank would be able to recoup it's money on sale of said property, that may have been their thinking. Naturally enough with property price collapses that wouldn't be realistic now, but it was relevant at the time to the lending criteria.  

Why did the borrower want to borrow so much if he couldn't afford the repayments. How did he think he could repay it.

If this has destroyed his life why did the borrow not just hand everything back to the bank, go broke and start again.

For some one who was so ill according to you, they were able to sell a business, sell stock, deal with two banks, accountants, take medication and manage to borrow money they could not repay. Did this person not have a solicitor or accountant or spouse helping them?

Why do you think it's solely up to the bank to see if the loan is viable, surely it's up to the borrower who is asking for the money to evaluate if the business/land/asset justifies the borrowings?

You mention 'test case'. So far you've not demonstrated in any concrete way what was incorrect about the banks lending decision in your friends situation. Not to take away from you there was certainly reckless lending going on, but I believe it takes two, so the borrower has to share some of the blame. Whether one could prove such recklessness, well it's never been done as far as I know. Does it even exist as a legal concept in Ireland.

Is your friend actually planning to take a court case against the bank? If he is, he'd want to be a lot clearer than you are explainaing the situation on here. If he's broke how can he afford to go to law?


----------



## Luternau

@honest
It is very strange that you have dug up an old thread. This is not relevant to here.

Anyway, the bank has no duty to determine mental capacity or to act as medical guardian. If the borrower did not disclose a material fact, that may impact the loan application, it is the bank that should feel hard done by-even if the information was withheld due to mental incapacity. Seems an unarguable case on that point.
It would be interestig to see the fiduciary duty or prudent lending tested based on the facts presented in the application though.


----------



## Raging Bull

The bank has a responsibility in law to make sure a person has capacity to act so if they knew of mental problems there is a higher duty of care

In answer to the main thread you can't sue for reckless lending but you can sue for negligence and breach of duty of care....I'm trying this but there are other aspects of fraud and misrepresentation with my case...the Bank in question won't provide any paperwork to back up they done it correctly


----------



## honest

Raging Bull said:


> In answer to the main thread you can't sue for reckless lending but you can sue for negligence and breach of duty of care


 
So a bank is actually supposed to check if a borrower can meet loan repayments?   Or the bank is supposed to look for some sort of projections?    Interesting, neither of that was done in this case, or the borrower would not have got the loan.




Raging Bull said:


> .the Bank in question won't provide any paperwork to back up they done it correctly


 Same in this case, except they will not provide any paperwork to show they they evaluated the borrowers ability to repay at all.    The accountants figures show that the borrowers income - at any stage in his life -  was only a fraction of what would have been necessary to pay the mortgage.  Is the borrower entitled to ask for the complete file from the lender, showing the lenders calculations ( if any ) showing the borrower could meet monthly repayments?


----------



## Time

> Is the borrower entitled to ask for the complete file from the lender, showing the lenders calculations ( if any ) showing the borrower could meet monthly repayments?


Yes, see Section 4 Data Protection Act 1988 to 2003.


----------



## Jim2007

Time said:


> Yes, see Section 4 Data Protection Act 1988 to 2003.



A customer is entitled to ask for a a copy of the personal data the business holds on them, that is all.  According to the law, like any business, the bank is required to hold only data necessary for the operation of it's business, in other words the finally signed contract, nothing else.  Most businesses have a policy which requires the destruction all unnecessary data, so it is very unlikely that you will find much if anything relating to the decision itself.


----------



## munchy

Jim2007 said:


> A customer is entitled to ask for a a copy of the personal data the business holds on them, that is all.  According to the law, like any business, the bank is required to hold only data necessary for the operation of it's business, in other words the finally signed contract, nothing else.  Most businesses have a policy which requires the destruction all unnecessary data, so it is very unlikely that you will find much if anything relating to the decision itself.



A friend of mine had a dispute with the EBS recently and a solicitor recommend she ask for all the data and correspondence in her file. They dithered but eventually sent her everything and she even got given internal emails where her case was being passed around, and some very detailed info was sent to her. After she got the wad of documents, the bank backed off on their dispute (regarding a condition of the loan)


----------



## Raging Bull

The absence of paperwork is a sign or symptom of negligence
in response to honest the Bank is supposed to assess affordability with a SVR +2% stress test and can evidence that....most didn't do it

THE negilgence angle is difficult particularly when the Bank plays games over the paperwork...in my case they had audacity to say that the Terms of Business letter which is supposed to set out their relstionship with me is not Personal Data !!!. They also said that their valutional panel is commercially sensitive and can't tell me anything !!! Seriously !!

The great thing about a negligence case is you can shift burden of proof with Res Ipsa Loquitir in laymans terms the facts speak for themselves


----------



## Luternau

Raging Bull said:


> The bank has a responsibility in law to make sure a person has capacity to act so if they knew of mental problems there is a higher duty of care.



A responsibility in law to prove a person has the capacity to act is not the same as a responsibility to prove mental capacity.

Responsibility to act for example would be -is the person authorised to sign or enter into the contract.

If medical facts relating to the customer are withheld or otherwise not declared in full, how could the bank form any decision other than of sane or competent mind? If information relating to the capacity of the borrower is deliberately withheld, the bank could argue misrepresentation, non-disclosure or fraud!


----------



## Jim2007

munchy said:


> A friend of mine had a dispute with the EBS recently and a solicitor recommend she ask for all the data and correspondence in her file. They dithered but eventually sent her everything and she even got given internal emails where her case was being passed around, and some very detailed info was sent to her. After she got the wad of documents, the bank backed off on their dispute (regarding a condition of the loan)



They can't sanitise a file once a request has been made, or at least it would be very stupid to do it... But what is on individual file depends on the relationship manager and what they believe is necessary for the operation of their business - over the years I've seen plenty of memo's going out legal departments instructing business to clean up their files.  Remember it is also an offence to collect and store unnecessary personal data.


----------



## Jim2007

Raging Bull said:


> The absence of paperwork is a sign or symptom of negligence



Not necessarily so, if a bank has been complying with the DPA and the paperwork is no longer necessary for the operation of their business, then it should be destroyed as required by law.



Raging Bull said:


> in response to honest the Bank is supposed to assess affordability with a SVR +2% stress test and can evidence that....most didn't do it



What is the source for this requirement???



Raging Bull said:


> THE negilgence angle is difficult particularly when the Bank plays games over the paperwork...in my case they had audacity to say that the Terms of Business letter which is supposed to set out their relstionship with me is not Personal Data !!!. They also said that their valutional panel is commercially sensitive and can't tell me anything !!! Seriously !!



How does this become personal data within the meaning of the DPA???


----------



## Raging Bull

1) Bank has not said its destroyed they are claiming commercial sensitvity. Bank is also required to hold certain data per consumer protection code
2) Its a regulatory requirement
3) If a documents purpose is to set out a banks working relationship with you how on earth can that not be considered personal data

The point is somewhat moot since I have requested formal discovery


----------



## Jim2007

Raging Bull said:


> 1) Bank has not said its destroyed they are claiming commercial sensitvity. Bank is also required to hold certain data per consumer protection code
> 2) Its a regulatory requirement



I am aware of the various documents that the bank is required to provide you with at different stages of the lending process, but I am not aware of any requirements for them to retain these documents after the decision has been made.  One would think it might be prudent for them to do so, but...  



Raging Bull said:


> 3) If a documents purpose is to set out a banks working relationship with you how on earth can that not be considered personal data



Go and read the definition of personal data in the relevant legislation, it is much more restricted than people think.


----------



## mrbea

Jim2007 said:


> A customer is entitled to ask for a  copy of the personal data the business holds on them



Thanks for that. Have seen a file which was got, and it shows that the building society knew the person borrowing the money had not the income to repay the mortgage, but it lent the money anyway.  It also shows correspondence between broker and building society, which gives false and misleading information about the borrower.  The borrower did not give or sign this false information.  The broker also claimed the borrower had loan approval from his own bank, which was not true, and urged the building society that it should try to "win" the business. 

 Would the borrower have a case of suing the building society, as if it had done its homework properly and not rushed the mortgage through, it would not have lent the money?


----------



## Bronte

mrbea said:


> The borrower did not give or sign this false information.


 
So the broker and bank conspired against the borrower to give him money he didn't want or couldn't afford?  And the borrower had nothing to do with any of it is basically what you are saying.  Did the bank and broker also pick out the property?


----------



## Gerry Canning

RSTA. 

You asked can you sue? You can indeed, will you get anywhere?, I doubt it .

Maybe your question should be ;
 If I stay in arrears and cannot afford Mortgage can I use the defense of poor lending to help me . I think you can use that as a defense to lessen your liability in that you can show you now know your poor repayment capacity was known by (professionals) from Day 1 .
I assume that when you took the Mortgage you naiively believed you could afford it. 

Remember ,it was you who proceeeded.The McConnon case was on commercial loans so I would think since it was a business loan it would be looked at from a business view.

To be given 7 times annual salary was always suspect!!


----------



## mrbea

Bronte said:


> So the broker and bank conspired against the borrower to give him money he didn't want or couldn't afford?


 
The building society lent the borrower ( whom it never met ) money the borrower had no means of repaying, because the broker supplied false information to the building society.  The building society was negligent in checking if it was true or not.  The broker in question had a relatively short trading history with the building society, both before the loan and since the loan. ( which happened during the so called boom of course ).  Its a case of the broker defrauding the building society and the building society not checking any of the information they were fed.   




Bronte said:


> Did the bank and broker also pick out the property?


I would say the only property the person in the building society and the person in the mortgage brokers picked out were their own properties they bought with their own bonuses and salaries they got in those heady years.


----------



## Gerry Canning

Mr bea; 

Looks bad for Lender and Broker , I agree.

Customer still signed for it though , he still has the major responsiblity. 
It may well be he can defend himself as already posted , but it will be a hard one methinks.


----------



## mrbea

Gerry Canning said:


> Mr bea;
> 
> Looks bad for Lender and Broker , I agree.
> 
> Customer still signed for it though , he still has the major responsiblity.
> It may well be he can defend himself as already posted , but it will be a hard one methinks.


 
I agree with you ( buyer beware and all that ), and thanks for your thoughts on the matter.  However the customer did not sign for the ridiculous lies the broker wrote to the building society, and the loan should not have been approved, so its going to be an interesting one.


----------



## Bronte

mrbea said:


> The building society lent the borrower money the borrower had no means of repaying,


 
Why did the borrower borrow money he couldn't repay?

That's a strong word 'negligence' you are using in relation to the building society.  What checking should they have done?  Is the broker still in existence?


----------



## mrbea

Bronte said:


> What checking should they have done?


The building society should have checked if the borrower had a job. They should have checked his income. They should have checked to see if his assets were as the broker said they were. They should have phoned or contacted the borrowers own bank to see if they had approved him for the loan the broker said they did....or at least to get a heads up on the borrower. The brokers own bank (or any other bank ) never even offered a twentieth of the money the building society did, at any stage in the borrowers lifetime. The building society should have met the borrower, or a second person from the brokers should have met the borrower. Someone should have asked him how was the money going to be repaid. In the file from the building society its clear that they calculated the borrwer had not the ability to repay, or indeed a plan to repay, but still it slipped through the net. 

There is no law against anyone walking in of the street in to a broker or a building society and asking for a loan. There is no law against anyone walking in of the street in to a broker or a building society and asking for sponsorship or a handout. Before lending money though, should not a bank always look for ability to meet repayments, or some plan to repay the mortgage? They do now anyway.

What I would love to know though is why the individual in the brokers recommended in writing to the building society they "win" the business, and why the broker supplied false information. Were some brokers or bankers under pressure to achieve a certain level to meet a target, in order to get a bonus? For example, sell 19 mortgages a month; get no bonus....but hit a target of 20 a month get a large bonus? And this was the 20th mortgage at the end of the month and it was rushed through?


----------



## Time

Back in the day a fake P60 with whatever you wanted on it could be bought for a few hundred. A full set of fake accounts for around 1000. Presented with such documents how is a bank meant to check anything?


----------



## wbbs

Banks usually took a salary certificate completed by the employer, 2 recent pay slips and a P60.  This was the checking, 3 items to be cross referenced to ensure they were accurate, were all of these documents provided and were all falsified?

As for ringing another bank asking if someone had or had not approval I doubt a bank would give out that info to a competitor not to mention the confidentiality aspect.

I see nothing sinister in the term 'win' relating to getting the business, all banks were trying to poach customers from each other and someone would win the business.  Equally most brokers worked on commission from the lenders,  not aware of extra bonuses they could earn based on numbers, usually the amount they earned was a percentage of the loans approved.

Did the customer not sign a completed application form with the income details on it?  How did they not know what income was being completed for them?


----------



## mrbea

Time said:


> Back in the day a fake P60 with whatever you wanted on it could be bought for a few hundred. A full set of fake accounts for around 1000. Presented with such documents how is a bank meant to check anything?


That is the point: no false P60's were supplied, and no false accounts were supplied, yet the building society still lent the money. The big thick file received from the building society confirms that. 

The bank ( or building society ) could and in my opinion, should have done a few checks - just a phone call or two taking 5 minutes would have sufficed - and if it had, it would not have lent the money. 

"Back in the day", I wonder what sort of bonuses brokers and / or bankers got for hitting certain targets each month? I wonder if this loan was the one needed to reach a target for the month or quarter?



wbbs said:


> Banks usually took a salary certificate completed by the employer, 2 recent pay slips and a P60. This was the checking, 3 items to be cross referenced to ensure they were accurate, were all of these documents provided and were all falsified?


Not all the documents above were requested or provided.  None was falsified. The salary quoted in a letter from the broker to the building society was different to documented proof above. 




wbbs said:


> Did the customer not sign a completed application form with the income details on it?


The income box was left empty.  Must have been a Friday afternoon rush job!  Maybe even bank holiday weekend.



wbbs said:


> How did they not know what income was being completed for them?


 
They did not until they saw the file from the building society recently, which is years after the application.


----------



## 44brendan

There are definitely a large number of similar cases where proper due dilegence was not conducted by banks in approving mortgages based on documentation/information supplied by intermediaries. However, despite there being a number of reposession cases where this was brought up in Court, I have yet to see a judge refuse to grant an order on that basis. The bottom line is that the loan applicant applies to the Bank for a loan. The Bank grants the loan and the applicant(s) takes the money. There is no legal onus on the Bank to properly asses the risk that they are taking. Obviously this is standard practise, but it is not a legal obligation. As a result of poor analysis the Banks did lend to many clients who were not capable of meeting the repayments. However, from a legal perspective the Courts expect those who borrow money to repay it, unless they are minors or not of sound mind in entering the contract.


----------



## mrbea

wbbs said:


> As for ringing another bank asking if someone had or had not approval I doubt a bank would give out that info to a competitor not to mention the confidentiality aspect.


 You are probably right there.  However, sometimes a bank is given as a reference, for example if leasing a premises.  A third party may ask the bank if such and such is "good" to meet a certain commitment. 
If the borrowers own bank would not lend him €40,000 against a property why would the building society lend him €400,000?  Do the banks never seek references from each other?  




44brendan said:


> The bottom line is that the loan applicant applies to the Bank for a loan.


 If that happened in this case the borrower would not have got the loan.  What happened was the borrower applied to the broker, and the broker sent on incorrect information.  Surely the broker and building society should meet some standards?


----------



## 44brendan

Sorry, but the fact that he used a broker to process the application does not change the legality of the transaction. I agree that there are certain morality issues here but unfortunately that does not change the fact that the debt transaction was and is a legal obligation freely entered into.


----------



## Sunny

Incompetence is not illegal. Both parties voluntarily entered into a contract. No judge will ever ever find against the bank in cases like this. The borrower knew he would struggle to pay it back but still signed. The bank should have known the borrower would struggle to pay it back but still signed. Both parties are to blame but it doesn't make the contract invalid. 

People should spend their time trying to deal with the problem rather than dreaming up some mad legal loophole that will allow them to walk away over night. It's not going to happen.


----------



## Mrs Vimes

mrbea said:


> Would the borrower have a case of suing the building society, as if it had done its homework properly and not rushed the mortgage through, it would not have lent the money?



From the sound of things, the bank may have a case for fraud against the broker but I can't imagine that would help the borrower any.


----------



## Bronte

mrbea said:


> The income box was left empty. Must have been a Friday afternoon rush job! Maybe even bank holiday weekend.
> 
> .


 
So the borrower signed a form without checking it's accuracy?  Or he signed it knowing full well the broker was going to fill it out to suit the borrowers mortgage demand, on the property the borrower had looked at, wanted, bid on, paid booking deposit on, hired surveyor for, hired solicitor for, found broker for.  The property the borrower decided how much he wanted in mortgage for, and yet he apparently could not afford it.  Yes very much the broker and the banks fault the borrower is now in a mess.


----------



## mrbea

Sunny said:


> The bank should have known the borrower would struggle to pay it back but still signed.


 Actually documentation from the file show that the bank knew the borrower could not pay it back, but under pressure from the broker it slipped through the net anyway. The building society in question was not experienced in dealing with brokers, or at least this broker, and I believe the building societies relationship with this broker did not last long.  




Bronte said:


> So the borrower signed a form without checking it's accuracy?


 Any information on the application form was correct.  However certain information was left unfilled / unanswered, and is still unfilled / unanswered on the copies of the application form.  The borrower trusted the mortgage broker because that individual said they were the experts in financial matters, and the borrower knew the broker.  Hardly the borrowers entire fault that he found out years later, to his surprise and shock, that the broker had supplied fraudulent information to the building society, and that the building society made no attempt whatsoever to check it?


----------



## peteb

Please! There is no one that walked into a brokers in the peak of the boom and didn't know what was done on their behalf.  That's right - the mortgage broker works on behalf of his client the borrower.  If the borrower was unsure then he shouldnt have drawn down the funds.


----------



## Sunny

peteb said:


> Please! There is no one that walked into a brokers in the peak of the boom and didn't know what was done on their behalf. That's right - the mortgage broker works on behalf of his client the borrower. If the borrower was unsure then he shouldnt have drawn down the funds.


 
Absolutely. Indeed the brokers sold themselves on the fact that they knew how each bank carried out underwriting and what they looked for so they could maximise the mortgage that could be borrowed.


----------



## Gerry Canning

peteb; 

With respect , do not be so hard. A lot of people relied on (their) broker to get them a (flawed) dream. A lot of people (in hindsight) were (stupid) . 
Most people are unsure of what they sign. Most people trusted the (professionals) they were dealing with.
As these (professionals) were regulated? it was not for the consumer to 2nd guess these professionals.
Of course the client was (unsure) and of course with hindsight he should have been more careful.

I would suggest that in the (fluffy) times the Broker was more interested in Commission rather than his customer.


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## peteb

Gerry

With all due respect, isn't your background banking?  So surely you should have some insight as to how the banks handled matters.

It is always for a consumer to be aware, no matter what professional they engage.  If somebody came to me and said "great news, I can get you 500k.   It's going to cost you €2,500 a month to repay".  If I was earning €2,600 a month I would have thought to myself how am I possibly going to pay this back?!  As opposed to powering along and just taking it as a professional told me its fine!!


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## Jim2007

mrbea said:


> The building society lent the borrower ( whom it never met ) money the borrower had no means of repaying, because the broker supplied false information to the building society.



The broker acts as the agent of the borrower and the building society acted in good faith based on the information supplied, so do you think they are at fault???  

Your evidence suggest is that the broker failed to act according to your instructions or lack of instructions, so if you have any case, it is against the broker not the building society!


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## Gerry Canning

peteb; 

You are right , but I left banking 20 years ago. At that time as part of my Professional Competency I was required to test affordability . Stories in the (fluffy)times of 6+ income mortgages meant affordability went out the window..
I have mostly been in asset finance since then . The Rules (for me) remained the same ,if the customer was not able to afford ,I did not do the deal.

People did not just power along , they were driven along . Yes they were stupid/naiive/optomistic , but surely Mr Banker/Mr Broker  as regulated entities bear responsibility.
From what I see , WE are all on the Hook for Billions we have put intoBanks to sort miss-lending like this. 
Had ONE assistant-manager been jailed in circa2006 ,we would NOT be in recession.
Anyway , sermon over!!!!


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## peteb

Yes there was mortgage of 6 x income.  I got approved for 6 times my income and then had a guarantor for more on top of that.  At the time I got €266,000 on a salary of €30,000.  My repayments were about 40% of my income.  People said stretch yourself further and buy the biggest you can.  I didn't.  Because I had an idea of what I could afford and couldn't.  People need to take ownership of their own decisions.


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## Bronte

Jim2007 said:


> Your evidence suggest is that the broker failed to act according to your instructions or lack of instructions,


 
I didn't get that view at all.  

And based on what I heard everybody talking about at the time of all the crazy borrowing, people were vying with each other to have the best falsified accounts, forged P60's, most crooked broker.....  It was unbelievable.  People on low incomes, driving fab cars, borrowing to go on holidays while queuing up to outbid each other on houses yet to be built, and they didn't want 80% or 100% oh no.  And the credit card companies sending unsolicited cheques to people to spend spend spend.  And that's exactly what they did.


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## peteb

I'd have to agree with Bronte.  P60 and crazy income certs which people asked their employers to doctor were 10 a penny in the boom.  And that wasn't brokers or banks, that was people knowing what they were doing!


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## Gerry Canning

peteb; Bronte

Yup,  If anyone ie Banks/customers/advisors/agents/accountants had applied rudimentary caution we would not be in the unholy quandary we are wading through .

The Whole Herd instinct came in. 

Hope we succeed in sorting.


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## mrbea

Jim2007 said:


> The broker acts as the agent of the borrower and the building society acted in good faith based on the information supplied, so do you think they are at fault???


Because the broker in this case acted fraudently and because the building society accepted all information without checking any of it, yes I think they bear some responsibility. Even with the figures the broker supplied to the building society the borrower still could not afford the mortgage, but it still slipped through the net. The german banks who lent to our banks "in the day" thought there was some regulation in this country. 




peteb said:


> P60 and crazy income certs which people asked their employers to doctor were 10 a penny in the boom.


If you have knowledge of fraudulent behaviour by employers in relation to taxation matters you should inform the revenue.  I believe most employers acted and act honestly and responsibly, as do most brokers.




Gerry Canning said:


> Yes they were stupid/naiive/optomistic , but surely Mr Banker/Mr Broker as regulated entities bear responsibility.
> From what I see , WE are all on the Hook for Billions we have put intoBanks to sort miss-lending like this.
> Had ONE assistant-manager been jailed in circa2006 ,we would NOT be in recession.


 
Correct, and the most sensible thing that has been said about the whole mortgage crises / Irish recession in a long time.


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## Bronte

mrbea said:


> Even with the figures the broker supplied to the building society the borrower still could not afford the mortgage, but it still slipped through the net.


 
And still you won't answer why the borrower took the money when he couldn't afford it?

If you think you're going to win a legal case based on what you've posted on here I'd say you haven't a chance in hell.  In summary your case being 'I borrowed the money, I couldn't afford it, the broker lied, and the bank didn't check anything,' that's your case, so far.


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## mrbea

Bronte said:


> And still you won't answer why the borrower took the money when he couldn't afford it?


 You would need to ask the borrower that but I believe its because he was very foolish, got carried away, liked the property, trusted the broker and "sleepwalked" in to it as easily as the broker and building society approved the loan / told him he could afford it. The borrower was not very good with figures. I guess he trusted the broker and building society, who told him they were the financial experts. The building society was expert enough to calculate he could not afford the mortgage ( even with fraudulent figures and letters from the broker ) but they were not expert enough to tell him that.  Some sales people can be very polished and persuasive you know, they are trained and expert at that. Surely you got sales training too?


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## 44brendan

I'm not sure what your agenda is here. You have raised a number of valid points in respect of the the incompetence/malfeasance of come brokers in supplying incorrect information to banks and poor practises by banks in not proprely checking the information supplied. However those practices are not sufficient to take legal proceedings against a lender, while would require you to prove that the contract entered into between the lender and the bank was in some way flawed. This has been tried before unsucessfully. Perhaps morally the Banks should be held accountable for these sort of actions, but unfortunately there is no legal obligation upn them to properly assess the financial circumstances of borrowers. The arguement that "There should be a law against it" doesn't hold up to well in the courtroom


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## mrbea

44brendan said:


> Perhaps morally the Banks should be held accountable for these sort of actions, but unfortunately there is no legal obligation upn them to properly assess the financial circumstances of borrowers.


 Is there a legal obligation on brokers to not knowingly supply fraudulent information about a buyers circumstances / write pages about the borrower which the borrow did not know about?

I realise in this country there was no regulation and its ok for a building society to advertise themselves as "financial experts", and yet sell a mortgage to a borrower who could not - by the banks own written admission - afford the mortgage.


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## Gerry Canning

mrbea; 

There always was and is a legl/lawful obligation on Broker to supply genuine information. 
They can write pages on Borrower provided they believe said information to be true.

There was always Regulation on Building Society. Namely there were always under the Prime Rule of (acting in the best interests of the Consumer and the Integrity of the Market)
If Building Society admits to giving an unaffordable mortgage , then they have seriously weakened their case for full repayment.
How can they go to Court and then claim all funds due ?


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## Sunny

I think this thread has died a death at this stage....


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## Gerry Canning

Amen.


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## Jim2007

Bronte said:


> I didn't get that view at all.



My underlining: 



mrbea said:


> Have seen a file which was got, and it shows that the building society knew the person borrowing the money had not the income to repay the mortgage, but it lent the money anyway.  It also shows correspondence between broker and building society, which gives false and misleading information about the borrower.  The borrower did not give or sign this false information.  The broker also claimed the borrower had loan approval from his own bank, which was not true, and urged the building society that it should try to "win" the business.


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