# Prime Time will feature sub-prime mortgages tonight



## Brendan Burgess (10 Jul 2008)

RTE 1 

9.30pm to 10.15


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## Towger (10 Jul 2008)

Ahh, the regular doom and gloom merchants will be wheeled out for yet more talk of the 'R' Word.

I presume the program is the output of this request: http://www.askaboutmoney.com/showthread.php?t=56234


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## dutz (10 Jul 2008)

no it will be in relation to so called ''LIAR LOANS'' -


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## Kemo_Sabe (10 Jul 2008)

hopefully the canard that 'there are no sub-prime mortgages in Ireland' will be nailed by this programme


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## rmelly (10 Jul 2008)

I don't think anyone has ever said that - the existence of sub-prime lenders in Ireland clearly debunks that. 

As a matter of interest does anyone know what % of market is subprime? e.g. by loan value or by number of outstanding mortgages?


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## ClubMan (10 Jul 2008)

First things first - is there any strict/objective definition of what subprime means? Higher than normal rates to those with credit "issues" is one thing but is hardly definitive?


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## Mr DT (10 Jul 2008)

ClubMan said:


> First things first - is there any strict/objective definition of what subprime means? Higher than normal rates to those with credit "issues" is one thing but is hardly definitive?


 
Higger than norm rates, to those with credit issues, that don't have to prove thier level of income. Add in any mortgage over 30 years......thats sub prime isn't it?


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## rmelly (10 Jul 2008)

Mr DT said:


> Add in any mortgage over 30 years......thats sub prime isn't it?


 
Rubbish


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## Jethro Tull (10 Jul 2008)

Wikipedia article on 'Subprime Lending'


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## ClubMan (10 Jul 2008)

Mr DT said:


> Higger than norm rates, to those with credit issues, that don't have to prove thier level of income.


I was looking for something a bit more specific.


> Add in any mortgage over 30 years......thats sub prime isn't it?


No.


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## Remix (10 Jul 2008)

> There is no one definition of a subprime mortgage.
> The classification “subprime” generally is a
> lender-given designation for loans extended to borrowers
> with some sort of credit impairment, say, due
> ...


http://www.frbsf.org/publications/federalreserve/annual/2007/subprime.pdf

Fair to say that the Ireland faces more difficulties over what might be referred to as nonprime than with subprime ?


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## ClubMan (10 Jul 2008)

Thanks Remix. At least that's a *little *bit more specific.


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## webtax (10 Jul 2008)

rmelly said:


> Rubbish


 
Why rubbish?

If a person is given a mortgage that they will only be able to manage to repay by spreading it out over 30 years then would this not qualify as sub-prime? What % of their salary would be used up if the mortgage had to be repaid over 20 years as was the norm (and should return to being the norm now that the insanity of the housing boom is over)?

These loans were given by the friendly banks doing first time buyers a 'favour' by getting them up to their eyeballs in debt by driving up the demand & prices for housing.


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## z101 (10 Jul 2008)

Thats not sub prime. 
By that reasoning a 20 year mortgage is subprime as it longer that a 15 year for affordability reason .

Sub primes are on interest rates well over the norm as the recipients under usual criteria cant get a mortgage from a bank mainly due to their credit rating. That is why they are prepared/must (to) pay the higher interest rates as high street bank wont touch them as they are riskier. Too risky as it appears.
The term of the mortgage has nothing to do with it.


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## Dee101 (10 Jul 2008)

Just watching this program now and one thing that strikes me is - why wasn't this program done a year ago or more?. To warn people of the dangers of getting involved with these lenders/brokers. Bit late now!


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## charliemacck (10 Jul 2008)

Dee101 said:


> Just watching this program now and one thing that strikes me is - why wasn't this program done a year ago or more?. To warn people of the dangers of getting involved with these lenders/brokers. Bit late now!


 
Well its just yet more negativity from the "usual suspects". Its just media bandwagon jumping. Ignore and move on folks!


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## dazza21ie (10 Jul 2008)

charliemacck said:


> Well its just yet more negativity from the "usual suspects". Its just media bandwagon jumping. Ignore and move on folks!


 
The programme highlighted really serious concerns about the way brokers were selling mortgages. This has nothing to do with press negativity. Prime Time have been doing similar programmes for years. The nursing home scandals were revealed at the height of the boom.


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## ontour (10 Jul 2008)

What struck me was an Irish mentality of blaming the system / government/ institutions for problems of our own making.  It was the same with the first story about the fishermen and the years of illegal fishing.

The actor's voice of the person with three children portrayed herself as a victim of Start Mortgages.  I have no doubt that her husband's job loss was a great strain however it was quickly brushed by at the end of the piece that they 'were forced' to sell some land to pay off the arrears to Start.  You can't blame Start for trying to retrieve money from people who want to hang on to their investments rather than pay their mortgage provider.


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## dazza21ie (10 Jul 2008)

Start are well within their rights to recover any money due to them, however, there is something drastically wrong with the system if they are seeking reposesssion for 5k of arrears and incurr up to 10 times that in legal costs in trying to recover it.


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## LDFerguson (10 Jul 2008)

ontour said:


> The actor's voice of the person with three children portrayed herself as a victim of Start Mortgages. I have no doubt that her husband's job loss was a great strain however it was quickly brushed by at the end of the piece that they 'were forced' to sell some land to pay off the arrears to Start. You can't blame Start for trying to retrieve money from people who want to hang on to their investments rather than pay their mortgage provider.


 
Excellent point.  The unrealistic exaggerated accent of the actress and the point above that they had the resources to pay off the loan all along lost credibility for that section.  

Not for a moment condoning what went on in the Irish Mortgage Corporation, but I've respect for Frank Conway for appearing on the show to face the music, even if he didn't have much of substance to say at this point.  Can you imagine the tone of the inevitable meeting between the two staff and the directors tomorrow morning?


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## rob30 (10 Jul 2008)

ontour said:


> What struck me was an Irish mentality of blaming the system / government/ institutions for problems of our own making. It was the same with the first story about the fishermen and the years of illegal fishing.
> 
> The actor's voice of the person with three children portrayed herself as a victim of Start Mortgages. I have no doubt that her husband's job loss was a great strain however it was quickly brushed by at the end of the piece that they 'were forced' to sell some land to pay off the arrears to Start. You can't blame Start for trying to retrieve money from people who want to hang on to their investments rather than pay their mortgage provider.


 

I could not agree more with this opinion.
She said her husband lost his job, but she could not work as she had 3 children.
Now, what is wrong with the husband to say that he cannot look after the kids while she works to pay the mortgage. 
I dont think people have a gun put to their heads to get mortgages, so if you cannot pay it, you must be prepared to accept the consequences. 
The fact that they had assets, the land that they subsequently sold, and would not pay the mortgage, shows a very oldfashioned and blinkered financial acumen. 
I feel sorry for people with mortgage problems, but banks are banks, not proxy social welfare providers.


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## z105 (10 Jul 2008)

> She said her husband lost his job, but she could not work as she had 3 children.
> Now, what is wrong with the husband to say that he cannot look after the kids while she works to pay the mortgage.



Here here.

And what a wretched voice the actress had


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## z101 (10 Jul 2008)

Why couldn't he get a more competative mortgage if he had land assets ?? Why did they not deal with it sooner.

The whole piece seemed cut to bits and rushed. The practices shown dont surprise me in a business where people are on commission and put under pressure by managers to make sales that are getting thin on the ground.

Brendan looked well though.


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## Thomas22 (10 Jul 2008)

LDFerguson said:


> Excellent point.  The unrealistic exaggerated accent of the actress and the point above that they had the resources to pay off the loan all along lost credibility for that section.
> 
> Not for a moment condoning what went on in the Irish Mortgage Corporation, but I've respect for Frank Conway for appearing on the show to face the music, even if he didn't have much of substance to say at this point.  Can you imagine the tone of the inevitable meeting between the two staff and the directors tomorrow morning?



Not much point coming on the TV if you are going to make a bad situation worse. He come across terribly IMO. He was trying to come across outraged but all he got manage was a half arsed defence of the company, which in the face of the video evidence was the last thing he should have been trying to do.


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## charliemacck (11 Jul 2008)

Thomas22 said:


> Not much point coming on the TV if you are going to make a bad situation worse. He come across terribly IMO. He was trying to come across outraged but all he got manage was a half arsed defence of the company, which in the face of the video evidence was the last thing he should have been trying to do.


 
The man did fine. All fuss about nothing. So 2 people in his firm exaggerated a little to help someone onto the mortgage ladder. So what. Sure you can't get a mortgage on an average salary these days, but people have to buy house somehow.


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## PM1234 (11 Jul 2008)

ontour said:


> What struck me was an Irish mentality of blaming the system / government/ institutions for problems of our own making.  It was the same with the first story about the fishermen and the years of illegal fishing.
> 
> The actor's voice of the person with three children portrayed herself as a victim of Start Mortgages.  I have no doubt that her husband's job loss was a great strain however it was quickly brushed by at the end of the piece that they 'were forced' to sell some land to pay off the arrears to Start.  You can't blame Start for trying to retrieve money from people who want to hang on to their investments rather than pay their mortgage provider.




Well said!  The phrase 'You can't eat your cake and have it too' comes to mind.

The cases highlighted were poor examples and it was a poor programme. Media sensationalism. Too little, too late!


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## finty (11 Jul 2008)

Dee101 said:


> Just watching this program now and one thing that strikes me is - why wasn't this program done a year ago or more?. To warn people of the dangers of getting involved with these lenders/brokers. Bit late now!


 
Because doom and gloom is top of the agenda at every rte programming meeting at the moment. 

shock horror people who cant afford a mortgage getting in way over their heads!! 
neither of the 2 cases mentioned are anyway close to the norm. 

465 people taken to court last year, 200 by start. 70 repossession orders for start, half of the total.

OMG, I'm barracading my door now, they're not taking my house!!!

[broken link removed] I Told You So!!!!!


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## finty (11 Jul 2008)

Ceatharlach said:


> Why couldn't he get a more competative mortgage if he had land assets ?? Why did they not deal with it sooner.


 
Indeed, this case has more to do with one couples poor planning and not dealing with the problem when it arose than sub prime mortgages.

They owed money, didn't pay. They even had the means to pay and still didnt!! Then got sued!! Where's the problem with that?


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## Thomas22 (11 Jul 2008)

charliemacck said:


> The man did fine. All fuss about nothing. So 2 people in his firm exaggerated a little to help someone onto the mortgage ladder. So what. Sure you can't get a mortgage on an average salary these days, but people have to buy house somehow.



Exaggerated a little, your attitude astounds me! They lied to a bank application for credit. There is no point trying to get someone onto the "ladder" if they can't afford to be there.


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## oratone (11 Jul 2008)

he without sin etc..... well, lets sling one then. At ourselves.... It's easy to forget when you are in a situation like this and you a) want something and b) will do what you have to to get it. If some guy tells you he can do it and then you're complicit in the deal, I don't have a huge amount of sympathy (maybe I'm reading between too many lines but probably not too not far off). What I am concerned about is the 'debt consolidation' situation, where your home is at risk. We haven't seen the start of that yet. Anyway.....

The last thing lenders want to do is try to sell property at the moment. At a loss (perhaps?). The burrowing your head into the sand thing was a GREAT point. Talk to your lender straight away, even if you think there may be trouble ahead... and not just now. (and no, I don't work for one! phew). It's just sensible stuff.

As for the overall thing on primetime last night..... well... Never spend what you can't afford, and I'm sure there are plenty of people out there who have been told that they will have nothing to worry about. It's not the government's fault, it's not the lenders' faults. I would suggest greed has a large part to play here.

Oh, and bye the way, we should have seen in coming a few years ago: link here: http://news.bbc.co.uk/2/hi/business/3478635.stm

That was 2004 when it got silly! Forewarned etc....


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## ontour (11 Jul 2008)

Did anyone else notice that the first time that Brendan's name came up, it had 'www.itsyourmoney.ie' beneath it?  The second time it had AAM.  Is Brendan double jobbing?  and so many poor folk out there who can't find a job appropriate to their lifestyle choices!


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## charliemacck (11 Jul 2008)

Thomas22 said:


> Exaggerated a little, your attitude astounds me! They lied to a bank application for credit. There is no point trying to get someone onto the "ladder" if they can't afford to be there.


 
I don't consider it lying just exaggeration, the reporter pretended he had a good job didn't he. This is just more property bashing from the usual bunch of lefties in RTE. Programmes like this are sending us into recession. Its quite right that pessimistic nonsense like that is banned from this site.


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## oratone (11 Jul 2008)

Sorry. Had to.

There's no wrong or right here, just judgement calls. On the individuals concerned and the lenders. Could have gone very well at one time. Unfortunatley not now. Always focus on the cashflow first my friends.


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## BoscoTalking (11 Jul 2008)

I thought this programme was very very poor to be fair. 
It was surely too late and should have been made/ investigated at the height of the boom when it was obvious it was going on. I was one of those people who fluffed my way through the application with the help of a broker - not so blatant as the ones on Prime time though. I knew we had the capacity to make the repayments so thought hey if the bank does not look at each application properly we can have the house we want - and it worked. I don't blame the people for doing it to get the house, sure the broker lied to the bank and the bank turned a blind eye. 
But regarding the lady who had 3 children - there was most likely a reason why the couple had gone with this lender in the first place. And i thought it was odd that she kept referring to the man / bailiff whatever he was, being old and elderly.


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## Brendan Burgess (11 Jul 2008)

Folks

Off topic and potentially defamatory posts removed. Please stay on thread. 

Brendan


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## clubsandwich (11 Jul 2008)

pennypitstop said:


> I thought this programme was very very poor to be fair.
> It was surely too late and should have been made/ investigated at the height of the boom when it was obvious it was going on. I was one of those people who fluffed my way through the application with the help of a broker - not so blatant as the ones on Prime time though. I knew we had the capacity to make the repayments so thought hey if the bank does not look at each application properly we can have the house we want - and it worked. I don't blame the people for doing it to get the house, sure the broker lied to the bank and the bank turned a blind eye.
> But regarding the lady who had 3 children - there was most likely a reason why the couple had gone with this lender in the first place. And i thought it was odd that she kept referring to the man / bailiff whatever he was, being old and elderly.



I agree 100%. If this program had any merit they would have disclosed the reasons why this "lady" went down the subprime route in the first place - the usual suspects being either previous bad credit or unproven income.
The actors voice was probably accurately reflecting the womans over emphasis on the fact that she had "_three small children"_ - it was almost as if she shouldn't have to deal with the situation at all, the poor kids are traumatised (with full thick cork accent)


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## JR Rizzo (11 Jul 2008)

The show's part on "sub-prime in ireland" made for good watching!!!!

It probably presented glossed up extreme situations,
- which seemed to have annoyed alot of posters
but thats OK cause it HAS TO BE for TV viewing and 
RTE is being consistent giving the view from other side, ie opposite to the 
SPIN of banks and their so called chief economists, estate agents, construction, etc

The ugly prospect of repossessions and court house meetings
is pretty scary and depressing - how will Irish society handle it??
BUT THATS WHAT HAPPENS WHEN YOU COME TO END THE OF A CREDIT DRIVEN BOOM!

I think it highlights the *massive financial illiteracy in Ireland*

Ireland needs more "prime time" educational shows for the public,
the shows shouldnt be SCARY or for pure entertainment - like last night
and any Eddie Hobbs shows,
but SIMPLE and FUN, but realistic, in which anyone can get value from.
( I'd like to see Brendan get a role in this - did very well last night)

If Irish people were more financially educated they could see the POSSIBLE truths 
behind alot of the over optimistic promises and offers that unaccountable and 
greed-driven financial professionals have been dishing out last few years we wouldnt 
be looking into this economic abyss.
- ie "property will never go down", "rent is dead money", "stocks will
keep going up from these highs", "you can afford a bigger mortgage"

people naturally love to boast to anyone how much their house is gone up
and waffle about their *greed* driven plans for making more paper money,

but when it goes bad (stock market crash, mortgage arrears) their *fear*
will cause them to ditch accountability and sometimes just pretend these losses and arrears
simply dont exist!! (for not selling when things were rosey)

The pain has only started! 
JR.


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## fobs (11 Jul 2008)

I felt we didn't get the whole story and that the couple should have been advised to pay the 5000 arrears before going to court where it turned into 18,000 they owed.

They didn't say what steps Start had taken before the court case came about as the woman led us to believe it was out of the blue with no warnings.

 I felt that maybe the land was family land (rather than their land)  and had been sold to assist them rather than the land being theirs but that was my opinion.


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## DerKaiser (11 Jul 2008)

charliemacck said:


> The man did fine. All fuss about nothing. So 2 people in his firm exaggerated a little to help someone onto the mortgage ladder. So what. Sure you can't get a mortgage on an average salary these days, but people have to buy house somehow.


Ah Charlie I think you'll find the reason people can't afford a house in the first place is because they're being bid against by other people whose incomes are being exaggerated.  
Banks/Brokers/Buyers should be forced to adhere to a strict policy of verifying disposable income and ensuring that in a stressed situation there's enough left to live on after payment of the mortgage (and a pension contribution in a perfect society).  
If everyone had played by these rules then more or less the same people would be in the same houses now most likely with 25-30% less of a mortgage.


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## BoscoTalking (11 Jul 2008)

DerKaiser said:


> If everyone had played by these rules then more or less the same people would be in the same houses now most likely with 25-30% less of a mortgage.


Possibly - possibly not.


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## charliemacck (11 Jul 2008)

DerKaiser said:


> If everyone had played by these rules then more or less the same people would be in the same houses now most likely with 25-30% less of a mortgage.


 
And we wouldn't have seen the strong economic growth we've had in the past decade either and a lot of people would be a lot poorer.  Sorry but you are trying to protect people from themselves, typical left wing thinking in my book. If Mr X feels that he can afford to buy my house, then he should be allowed to buy it. Its not the brokers or banks jobs to mollycoddle them any more than you should asked by shopkeepers in Dunnes if youre sure you can afford the groceries in your basket!


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## sandymount (11 Jul 2008)

charliemacck said:


> And we wouldn't have seen the strong economic growth we've had in the past decade either and a lot of people would be a lot poorer.  Sorry but you are trying to protect people from themselves, typical left wing thinking in my book. If Mr X feels that he can afford to buy my house, then he should be allowed to buy it. Its not the brokers or banks jobs to mollycoddle them any more than you should asked by shopkeepers in Dunnes if youre sure you can afford the groceries in your basket!



Big difference, the banks lend you the money to buy the house. If you lie on your application, your are probably guilt of fraud, I would expect that this would be in the T&C. If the broker was aided you, they are probably also guilty. The


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## Jimbob2 (11 Jul 2008)

I thought the mortgage company director's defence was interesting. 
He claimed he had only seen the footage that afternoon so of course he's going to want to do a full investigation first, he wasn't going to condemn an employee and admit to breaching the rules on live TV and Little was pretty silly to push him on it. 

What I found interesting were the significant facts he brought up which were left out of the report and not denied by Little.

He claimed that in the meeting the reporter told the broker that he had €25k in savings and that he had an aunt who could help him out. This was never mentioned by the programme and could have made a significant differnece to his application.

Also, the report made it sound like he was offered the money. He wasn't. he got an all but worthless 'Approval In Principal' letter which can have all manner of conditions on it and is not an offer of money.

If it's called the 'lying loan' in the US you can bet that the sub prime lenders here know full well that applicants and brokers stretch the truth; why else would they be applying to a sub prime lender? I imagine this is very much factored into their decision making.

I have no affilation with anyone involved with the programme, I just thought it was pretty selective and one sided.


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## webtax (11 Jul 2008)

charliemacck said:


> And we wouldn't have seen the strong economic growth we've had in the past decade either and a lot of people would be a lot poorer.


 
We could still have the export based growth that we had in the early years of the celtic tiger and a sustainable competitive economic model.Who would be poorer besides the property developers?



charliemacck said:


> Sorry but you are trying to protect people from themselves, typical left wing thinking in my book. If Mr X feels that he can afford to buy my house, then he should be allowed to buy it. Its not the brokers or banks jobs to mollycoddle them any more than you should asked by shopkeepers in Dunnes if youre sure you can afford the groceries in your basket!


 
This type of logic does not hold water when you are talking about an essential such as housing. What do you propose any couple with children do? Tell the builder their houses are too expensive and live on the streets? Pay massive rent to a landlord who could sell up at a months notice?
People have no choice but to pay what the market dictates, and when the banks & builders are given full control of the market we can see what happens.
The governments job is to look after its citizens and ensure the economy is run in a sustainable manner. They could have easily banned 100% mortgages and limited borrowings to 3/4 times a households income but chose not to.


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## brodiebabe (11 Jul 2008)

Did anyone notice that it was very strangely edited?  It seemed like certain people were cut off at certain points while in conversation.  it all seemed very choppy to me.


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## Towger (11 Jul 2008)

brodiebabe said:


> Did anyone notice that it was very strangely edited? It seemed like certain people were cut off at certain points while in conversation. it all seemed very choppy to me.


 
I noticed that as well. The audio 'sounded' ok, but the video jumped. Especially on the clips of the woman with 3 children. It also happened with Brendan to.


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## F. Kruger (11 Jul 2008)

Jimbob2 said:


> What I found interesting were the significant facts he brought up which were left out of the report and not denied by Little.
> 
> He claimed that in the meeting the reporter told the broker that he had €25k in savings and that he had an aunt who could help him out. This was never mentioned by the programme and could have made a significant differnece to his application.


 
If this does, in fact, turn out to be true; I would hope that all concerned would be made apologise, publically, to IMC.


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## JR Rizzo (11 Jul 2008)

charliemacck said:


> And we wouldn't have seen the strong economic growth we've had in the past decade either and a lot of people would be a lot poorer. Sorry but you are trying to protect people from themselves, typical left wing thinking in my book. If Mr X feels that he can afford to buy my house, then he should be allowed to buy it. Its not the brokers or banks jobs to mollycoddle them any more than you should asked by shopkeepers in Dunnes if youre sure you can afford the groceries in your basket!


 
strong economic growth doesnt come from stretching yourself (legally or illegally) to take out an even bigger mortgage,
which will inturn fuels inflation -> increase money supply.

people may have been stretching themseleves 10, even 5 years ago
but when property fundamentals got so out of line with historical
the banks and brokers should have been alot more sensible and
stricter with loans for ALL, and yes they should have mollycoddled
customers advising them AGAINST 100% interest-only high-income multiple mortgages after so many strong years of growth
-> in fact they did the OPPOSITE, ie go on and borrow more and treat
yourself!

and "poor" is a relative term wrt inflation and debt levels
- alot of people may have been poorer, but alot would also not be up to
their eyeballs in loans when the downturn crunch hits.

the strong growth came from job creation and salary growth (including construction) which really came from low corporation taxes...

financial professionals are supposed to get trained and qualified in order
to protect consumers from themselves, and protect their lenders
from making bad loans (eg stress test your repayments at +2% interest rates)
otherwise its just GAMBLING!!!

alot of brokers and estate agents arent really qualified in proper
financial skills, they are just blatant salesmen, 
and if they dont help Mr X FEEL that he can buy your house, then the competition will!

in recent years, in the midst of hysteria and jubilation, property
became more of a GAMBLE than investment in ireland, 
just like dot.com bubble,
there is less protection and mollycoddling for Mr X when investing in the
stock market, *but usually has to do it with his own money *(leverage, margin accounts aside)

if you lose your "property investment bet", you are usually playing
with the banks money, and the banks' shareholders

economic prosperity does need people to take on debt and take risks,
but its a balancing act!
Ireland lost most influence to balance this by joining euro

JR.


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## Jimbob2 (11 Jul 2008)

> I would hope that all concerned would be made apologise, publically, to IMC.


 
I'm not sure there's a need to go that far. The broker clearly lied to the lender by saying he was on €70k salary even though he told her he was on €50k. The other broker was clearly telling him to be dishonest about the money coming in and out of his accounts. I don't know the exact rules, but this has to be well dodgy.

It must have come up in subsequent conversations with the broker that he was in fact borrowing the €25k becasue the reporter said as much when showing the approval in principal letter. So if it is the case that the reporter initially told them he had €25k and later said he was borrowing it, then he was lying to them in the initial meeting.

Of course he was lying to them because he was an undercover reporter and not a self employed person looking for a mortgage, but within the context of applying for the loan under the guise of a self employed person he lied to the broker about his current financial situation and this was not properly explained at all. Little did not refute any of the director's claims about what the reporter said in the initial meeting.

I just thought that aspect a bit strange. It seems the reporter felt the need to lie about his financial situation to the broker in order to prove that it's easy to get approval for a sub prime loan if you lie!


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## F. Kruger (11 Jul 2008)

Jimbob2 said:


> It seems the reporter felt the need to lie about his financial situation to the broker in order to prove that it's easy to get approval for a sub prime loan if you lie!


 
So it's may well be that the reporter was deliberate in his deception in order to get an outcome that he wanted from the story?

Why make a programme like this if the viewer is not presented with all the information so that they can make a balanced judgement on the content?

Give us all the information, otherwise we should not be even entertaining such a topic.


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## DerKaiser (11 Jul 2008)

charliemacck said:


> And we wouldn't have seen the strong economic growth we've had in the past decade either and a lot of people would be a lot poorer. Sorry but you are trying to protect people from themselves, typical left wing thinking in my book. If Mr X feels that he can afford to buy my house, then he should be allowed to buy it. Its not the brokers or banks jobs to mollycoddle them any more than you should asked by shopkeepers in Dunnes if youre sure you can afford the groceries in your basket!


you'd be the first person to ever imply I was left wing!  
Any economic "growth" on the back of the simple trick of overvaluing our housing stock is now being reversed leaving the actual gains from increased productivity.
The only job of the banks is to protect the interests of their shareholders which they clearly haven't done in taking on the risks they did.
I don't think it's left wing to ensure appropriate regulations are in place to allow the market perform efficiently and not be at the whim of the interests of a minority of its participants


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## Jimbob2 (11 Jul 2008)

> Give us all the information, otherwise we should not be even entertaining such a topic.


 
Again, I think you're over reacting to what was in the programme. I'm not suggesting that the programme shouldn't have been made. Nor am I suggesting that the only reason the brokers behaved inappropriately is because the reporter lied to them in the initial meeting. This seems to be what you are implying.

Whether or not he had €25k in savings has no bearing on one broker changing his salary to €70k from €50k nor has it any impact on the other broker telling him to deliberatly deceive the lender regarding the amount of money in his account by lodging and withdrawing the same amount.

I think by not providing the full picture allows the company room for manoevre when trying to justify the actions of their brokers, which is exactly what the director did. 

My main point is that it seemed unnecessary for the reporter to add to the lies being told and weakened the argument of the overall piece by not including it.


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## BK0001 (11 Jul 2008)

It was interesting to see the female broker when discussing the valuation of the property, mention getting the property valued by a EA 'on the inside'. I wonder what she was eluding to there?


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## Jonathan.OB (11 Jul 2008)

she didn't mean anything by that. I believe she was only referring to a panel of valuers. Valuers do not inflate purchase prices nowadays.


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## Afuera (11 Jul 2008)

Jonathan.OB said:


> Valuers do not inflate purchase prices nowadays.


Nowadays? When was this practise stopped?


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## sherib (11 Jul 2008)

IMO it was the worst Prime Time special I've ever seen - so poorly put together I wonder did RTE have a gap in the schedule that had to be filled at short notice? It was so bad I only half watched. Brendan Burgess performed well as did "the defendant" broker, irrespective of the rights and wrongs.

I would have expected an informative explanation of sub-prime lending, the extent of same and more persuasive video using the hidden cameras. Maybe it was produced by an amateur? As already noted, the video jumped all over the place and the hysterical voice of the "mother of three" was simply unconvincing. If the point was to inform, the programme failed dismally.

I can remember when the max mortgage was two and a half times income with a deposit of 10/20% over 20 years. Interest rates then were very high and many of us did a bit of fancy footwork (!) to exaggerate our incomes; but that was a far cry from selling mortgages at much higher interest rates to those _least likely_ to be able to make repayments. It strikes me that there should be a law preventing such financial institutions operating or at least with very strict controls as I think (?) is enforced with money lenders. I don't suppose that's possible or likely to happen.


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## ontour (11 Jul 2008)

Jonathan,

This is what was said that you contend that she did not mean anything by:

IMC Employee:
'the valuation would have to come in for the higher price...the valuer would have to be on side...more so the estate agent..because that is probably primarily what the valuer would go on....  so say you had gotten the property for 230 and the estate agent said that it was 250.....so then as far as everyone would be concerned...the bank and everyone..the purchase price was 250...and you'd get 85% of that'

The implication is that valuers take what the estate agent says the sale price was as the valuation.  If this was the case it would call in to question the value of an 'independent' valuation.

[broken link removed]


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## Afuera (11 Jul 2008)

sherib said:


> I would have expected an informative explanation of sub-prime lending, the extent of same and more persuasive video using the hidden cameras. Maybe it was produced by an amateur? As already noted, the video jumped all over the place and the hysterical voice of the "mother of three" was simply unconvincing. If the point was to inform, the programme failed dismally.


I suppose they have to give the summer interns something to do. 



sherib said:


> I can remember when the max mortgage was two and a half times income with a deposit of 10/20% over 20 years. Interest rates then were very high and many of us did a bit of fancy footwork (!) to exaggerate our incomes; but that was a far cry from selling mortgages at much higher interest rates to those _least likely_ to be able to make repayments. It strikes me that there should be a law preventing such financial institutions operating or at least with very strict controls as I think (?) is enforced with money lenders. I don't suppose that's possible or likely to happen.


 You mean like a Financial Regulator or maybe a Central Bank type institution? Last I checked we had the highest paid head of a central bank in the western world. Now that they don't have to waste their time fiddling with currency controls I'm sure that they are fully in control of the situation  I mean what's the problem, even if we managed to become the most indebted country in Europe on a per capita basis, during a time of historically low interest rates?


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## Brianne (11 Jul 2008)

Too Little, Too Late, Horses and stable doors come to mind!!!
So we shouldn't protect people from themselves!! Our legal system demands we wear seat belts, don't speed, all our health and safety legislation demands protection for workers; we constantly protect people from their own foolishness or recklessness and in doing so protect others from their actions. At least we try to because we recognise the damage that can be done to others by an individual's actions.
Surely , world wide , actions by banks in reckless lending , which if it occurs at huge rates with potentially disastrous consequences for people who had nothing to do with it, are actions that should have been anticipated and must be legislated against .
Where was the Central Bank or have they any regulatory function?
RTE as usual ,great for the tabloid stuff but serious economic discussion and analysis, give me patience. It's absolutely pathetic now doing this sort of thing, three or four years ago would have been more useful!!!


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## Afuera (11 Jul 2008)

ontour said:


> The implication is that valuers take what the estate agent says the sale price was as the valuation. If this was the case it would call in to question the value of an 'independent' valuation.


It would also seriously call into question the quality of the loan book of the Irish banks.


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## Afuera (11 Jul 2008)

Brianne said:


> Surely , world wide , actions by banks in reckless lending , which if it occurs at huge rates with potentially disastrous consequences for people who had nothing to do with it, are actions that should have been anticipated and must be legislated against .


There is plenty of legislation in this area however if our Central Bank and Financial Regulator choses or fails to see risky behaviour what can you do?


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## Remix (11 Jul 2008)

Afuera said:


> It would also seriously call into question the quality of the loan book of the Irish banks.


 
In the US, the war of words over who is to blame - lender or borrower - turned into a massive class action lawsuit against one of the major banks (Washington Mutual) on the basis of inflated appraisals.

Shareholders who lost money are claiming that inflated appraisals resulted in the banks financial results being mistated.

And of course house buyers are suing are because they were misled about the value of their properties, which are now worth a far less than what they paid.

Evidence emerged in the form of emails that the bank was colluding to inflate the appraisal values of houses so that they could close larger loans.


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## clubsandwich (11 Jul 2008)

Remix said:


> In the US, the war of words over who is to blame - lender or borrower - turned into a massive class action lawsuit against one of the major banks (Washington Mutual) on the basis of inflated appraisals.
> 
> Shareholders who lost money are claiming that inflated appraisals resulted in the banks financial results being mistated.
> 
> ...


There is a vast difference between the irish market and the US market. In the US, subprime mortgages actually moved the market due to the percentage of total loan market made up of subprime loans.
The market share of such loans in Ireland was infinitely smaller and did not move the market in the same way - mainstream borrowers made up the majority of the market, they determined price in the market. Subprime in Ireland simply couldn't break price barriers like in the US for a number of reasons:


Smaller share of the market


Timescale - subprime came to Ireland much later than US


Maximum LTV of 90% in Ireland (at peak) vs 100% in US


Self Certification in Ireland required soem level of proof (bank statements) vs No documentary proof in US


Extemely limited number of subprime Buy to let "BTL" loans max 80% LTV vs widespread  incidences of 100% LTV BTL loans in US


Stamp duty in Ireland  vs  none  or next to none in US


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## podgerodge (13 Jul 2008)

ontour said:


> The actor's voice of the person with three children portrayed herself as a victim of Start Mortgages.  I have no doubt that her husband's job loss was a great strain however it was quickly brushed by at the end of the piece that they 'were forced' to sell some land to pay off the arrears to Start.  You can't blame Start for trying to retrieve money from people who want to hang on to their investments rather than pay their mortgage provider.




not only did they say she paid off the arrears, they said that she paid off the bulk of the loan!  made a joke of the whole story imo.


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## charliemacck (13 Jul 2008)

podgerodge said:


> not only did they say she paid off the arrears, they said that she paid off the bulk of the loan! made a joke of the whole story imo.


 
Exactly. Who we should we complain to about this programme? Is there a standard authority that RTE has to adhere to? I remember RTE had a prorgamme High Society which was based on what they claimed was a taped conversation that actually did not exist. I would like to see this programme also scrutinised.


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## europhile (26 Mar 2009)

My brother is looking to buy an apartment in Tallaght and Irish Mortgage Corporation is being pushed by the developer.  They have some sort of package and it seems like an easy option to go with them but I have my misgivings.  How do other posters feel about using IMC at the moment? Thanks.


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## obama (26 Mar 2009)

The company Moneyzone which was an entity of IMC are no longer in operation. IMC would be one of the biggest brokers in the country howeer there are plenty of brokers in Tallaght who could assist in the application.


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## NorthDrum (26 Mar 2009)

europhile said:


> My brother is looking to buy an apartment in Tallaght and Irish Mortgage Corporation is being pushed by the developer. They have some sort of package and it seems like an easy option to go with them but I have my misgivings. How do other posters feel about using IMC at the moment? Thanks.


 
Alot of developers have agreements with Mortgage brokers, its not that unusual.

Shop around if you are not sure. You are not obliged to take out a mortgage with anybody, nor are you obliged to use any specific broker. If you know of a friend or family mortgage broker, consult them . .


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