# Bank Made Up Security



## Alpha002 (21 Jan 2014)

Dear all, I am currently trying to come to an arrangement with AIB on an investment property. As part of the Freedom of Information Act, I obtained my file. Within the file, I obtained my the underwriter notes and bank manager notes. The underwriter  was not keen in approving the loan. It would seem that the Bank Manager made up a security (value of 300K) that I had offered to the bank as security. This seemed to have put the underwriter at ease. The loan was then approved. 
This security never existed and I only found out about it thru reading the internal notes. 
The security did not appear in the special conditions of the loan but did seem instrumental in the approval of the loan.

Will this invalidate the loan? 
How does this affect my situation?

Any advice would be greatful.


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## Brendan Burgess (21 Jan 2014)

Of course it invalidates the loan.

You probably never even applied for the loan.

Doesn't this prove that you never got the money?

But of course, you get to keep the investment property now, completely mortgage free. 

It's all part of the big game of Monopoly. You have just picked up one of the "Get out of jail free" cards. 

Check to see if there is any "t" which they did not cross. Maybe they owe you money? 

Brendan


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## Sunny (21 Jan 2014)

Not only does it invalidate the loan but I think you might actually be entitled to another house free as well. 

Or at least free banking for the rest of your life......


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## Billo (21 Jan 2014)

Who applied for the loan ?

Who took the money ?


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## Dearg Doom (21 Jan 2014)

Rather than deal with the sarcasm dripping from these posts, perhaps it's worth having a look at this key post on the reckless lending defense (there isn't one) and this thread from last year on the difference between your application and your loan agreement.


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## 44brendan (21 Jan 2014)

Alpha, as a new user you may not be in a position to interpret the earlier responses as extreme sarcasm! Unfortunately for you, the bottom line is that whatever process took place internally, should certainly be referred to the Bank's fraud department as has the appearance of a fraudlent transaction, but it cannot be used to absolve you of the obligation to repay the money you borrowed.


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## Brendan Burgess (21 Jan 2014)

44brendan said:


> Alpha, as a new user you may not be in a position to interpret the earlier responses as extreme sarcasm! Unfortunately for you, the bottom line is that whatever process took place internally, should certainly be referred to the Bank's fraud department as has the appearance of a fraudlent transaction, but it cannot be used to absolve you of the obligation to repay the money you borrowed.




Spoilsport!


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## 44brendan (21 Jan 2014)

The poor man was probably in the middle of a celabratory dance around his kitchen


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## Buddyboy (21 Jan 2014)

Thanks Brendan (s). I needed the laugh.  I could just see your face when you read the Original Post (OP).

Apologies to the original poster - you weren't the first to ask this type of question, you were just the straw that landed on Brendan's back.


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## mrbea (21 Jan 2014)

Alpha002 said:


> The underwriter was not keen in approving the loan. It would seem that the Bank Manager made up a security (value of 300K) that I had offered to the bank as security. This seemed to have put the underwriter at ease. The loan was then approved.
> This security never existed and I only found out about it thru reading the internal notes.
> The security did not appear in the special conditions of the loan but did seem instrumental in the approval of the loan.


 
Cases of fraud by the banks such as this are surfacing - I am aware of a similar case.  Some people are in a mess because certain individuals in banks did behave recklessly / fraudulently.  OP, in other countries activity like this by banks would not have been permitted.  Would you consider going to the media, who are investigating these cases? Like the CRC scandal, I think people will be amazed at what will eventually come out. 




44brendan said:


> The poor man was probably in the middle of a celabratory dance around his kitchen


 I would say certain bankers who post on this forum are doing celebratory dances at the thought not only have they got away with their past activity, they have got rewarded for it through their bonuses at the time, and these same banks have been bailed out.


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## Sunny (21 Jan 2014)

mrbea said:


> Cases of fraud by the banks such as this are surfacing - I am aware of a similar case. Some people are in a mess because certain individuals in banks did behave recklessly / fraudulently. OP, in other countries activity like this by banks would not have been permitted. Would you consider going to the media, who are investigating these cases? Like the CRC scandal, I think people will be amazed at what will eventually come out.
> 
> 
> 
> I would say certain bankers who post on this forum are doing celebratory dances at the thought not only have they got away with their past activity, they have got rewarded for it through their bonuses at the time, and these same banks have been bailed out.


 
Any banker that engaged in behaviour like that should never be allowed work in financial services again. They should also be forced to return any performance related bonus earned at that time. 

However none of that changes the fact that the OP borrowed the money knowing his own financial situation. The bank was defrauded in this situation through their own employee and their own incompetence. They are the victims. Not the OP.


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## mrbea (21 Jan 2014)

Sunny said:


> Any banker that engaged in behaviour like that should never be allowed work in financial services again. They should also be forced to return any performance related bonus earned at that time.


I agree. Lots of things "should" have been done that were not done and lots of things that were not done should have been done. So how do you suggest the bankers responsible "never be allowed work in financial services again"? And what the best way of ensuring they are "forced to return any performance related bonus earned at that time"?


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## mrbea (21 Jan 2014)

Sunny said:


> They are the victims.


You really think bankers are the victims? Are you aware of any bankers who have co-operated in investigating fraudulent and imprudent lending practices like that outlined above?...never mind any bankers who have sacked their colleagues as a result? As far as I was aware up until now, it was the borrower who was taking all the pain.


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## Brendan Burgess (21 Jan 2014)

mrbea said:


> You really think bankers are the victims? Are you aware of any bankers who have co-operated in investigating fraudulent and imprudent lending practices like that outlined above?...never mind any bankers who have sacked their colleagues as a result? As far as I was aware up until now, it was the borrower who was taking all the pain.



Sunny has made it quite clear that it is the banks who are the victims, not the bankers.


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## Dermot (21 Jan 2014)

I cannot understand how all the bonuses that were paid to bankers were allowed to stand when patently they were not earned in reality for the period that they were paid out for. There has to be a different method of calculating bonuses making sure that that they are paid out only when the loan is performing in a real  sense.  The methodology which has been used and continues to be used suits the elites in the banking sector.


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## mrbea (21 Jan 2014)

Brendan Burgess said:


> Sunny has made it quite clear that it is the banks who are the victims, not the bankers.


 
 Sunny said "The bank was defrauded in this situation through their own employee and their own incompetence. They are the victims. Not the OP."

 In the situation Sunny is talking about, the bankers in the bank involved
 got their pay, pensions and bonuses.   They are in all likelihood sleeping ok at night, without financial worries or stress, unlike the OP.  I agree "banks" are victims of rogue or unscrupulous bankers, but have the banks, as Sunny suggested should happen, done anything to ensure the       bankers responsible "never be allowed work in financial services again"?   And have the bankers done anything to ensure they are "forced to return any performance related bonus earned at that time"? 

To me, it looks a bit like the CRC scandal, only worse.


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## Sunny (22 Jan 2014)

mrbea said:


> Sunny said "The bank was defrauded in this situation through their own employee and their own incompetence. They are the victims. Not the OP."
> 
> In the situation Sunny is talking about, the bankers in the bank involved
> got their pay, pensions and bonuses. They are in all likelihood sleeping ok at night, without financial worries or stress, unlike the OP. I agree "banks" are victims of rogue or unscrupulous bankers, but have the banks, as Sunny suggested should happen, done anything to ensure the bankers responsible "never be allowed work in financial services again"? And have the bankers done anything to ensure they are "forced to return any performance related bonus earned at that time"?
> ...


 
Most people agree with you but what has that got to do with the fact that the OP took out a loan and has to pay it back? The bank didn't force the OP to take the loan. It didn't secretly increase the amount of the loan without telling the OP. It didn't secretly charge higher interest rates. It didn't force the OP to buy a house. It didn't force him to sign the contract. It didn't ban him from getting independent financial advice if he was unsure. 

By the sounds of the above, it sounds like one employee decided to defraud the bank by making up a security (and whoever did the underwriting for the loan obviously didn't check the security) for whatever reason to get the loan granted. But the OP obviously asked for the loan. Whatever happened internally in the bank has nothing to do with the OP.  There is a thing such as personal repsonsibility. The bank (taxpayer) will pay a price for poor underwriting and standards in the form of higher arrears and defaults. Unfortunately the OP has to pay a price as well. 

The OP should contact the bank and ask for his case to be examined and see what exact security is up against the loan. If the bank discovers the loan is backed with fake security and is riskier than they thought, it might be more likely to do a deal. At the very least, the bank should be informed so they can take action against employees if fraud was committed.


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## Gerry Canning (22 Jan 2014)

Sunny/Alpha.

It is very unlikely that Aib will take action on the staff member here. , Too many of AIB staff were at (unusual) practices, opening one case of poor lending will only continue to show the contamination that permeated AIB.(AIB have a lot of form over unethical practices over the years)
Whilst there is no (reckless lending) law , if Alpha can show loss Aib will be forced to at least try to be fair. 

I do NOT read that Alpha was just wanting to absolve from Alphas responsibility. 
He was asking for comments. 
Maybe he is a chancher but on info given , methinks Mr Chancher is Mr AIB ?


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## Sunny (22 Jan 2014)

Gerry Canning said:


> Sunny/Alpha.
> 
> It is very unlikely that Aib will take action on the staff member here. , Too many of AIB staff were at (unusual) practices, opening one case of poor lending will only continue to show the contamination that permeated AIB.(AIB have a lot of form over unethical practices over the years)
> Whilst there is no (reckless lending) law , if Alpha can show loss Aib will be forced to at least try to be fair.
> ...


 
I agree that they are unlikely to take action but again that has nothing to do with the OP's situation. If people want to be angry at the banks, fine. They deserve it. 

However, lets get real with this. The OP borrowed money. He now has to try and pay it back. Instead we have had numerous threads of people looking for legal loopholes that will allow them a quick exit from their problems. Its not fair on people to pretend that whatever reckless lending the banks engaged in can be used in Court to invalidate a contract. Its simply not true. The OP needs to face up to the fact that he voluntarily entered into a contract and now the contract needs to be fulfilled. If he can't pay it back, then that needs to be dealt with and there is plenty of good advice out there especially on this site. But can we stop indulging people and giving them hope when they post things like this. This site is better than that. 

If people think they have genuine reasons to contest the legality of their mortgage contract, they should contact a solicitor who should be able to tell them in 10 mins if they have valid case that is worth looking into.


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## elcato (22 Jan 2014)

> But can we stop indulging people and giving them hope when they post things like this. This site is better than that.


Hear, hear


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## mrbea (22 Jan 2014)

Sunny said:


> we have had numerous threads of people looking for legal loopholes that will allow them a quick exit from their problems.


 
I do not think anyone is looking for or will get "a quick exit from their problems."  However, in those few cases ( and it probably is only a fraction of 1% of mortgages ) where banks / building societies behaved fraudulently and did not act appropriatley, and where the borrower would not be in the position he/she is in but for the bank acting fraudulently, then I think its reasonable to suggest those individuals in the bank should be exposed.  The banks should take some responsibility for the matter.  If fraud is reported to them they should investigate it and take action.  Otherwise it may happen again. The borrower is partly responsible for the situation he/she finds him/herself in, but imho if a banker acted fraudulently then they are also at least partly responsible for the situation. 

I am sure the foreign banks who lent money to our banks thought our bankers should have acted with some responsibility.  In other jurisdictions banks and bankers who acted fraudulently and carelessly, to the detriment of others, get exposed and punished.


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## Gerry Canning (22 Jan 2014)

elcato said:


> Hear, hear


 

I hear you all.

Maybe too many threads are looking for get out clauses and maybe its just me , but I see the Bankers circling the wagons and cutely ensuring none of their brethern will be held to account because if even one is caught the whole false edifice of (professional lending ) falls.

I do not want to sound like an apologist for consumer chanchers but I sure as hell see little in the way of sanction on Bank officials !


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## 44brendan (22 Jan 2014)

Just to clarify some misconceptions. Firstly, the liability of the OP to payback the loan is not effected by any internal altering of documentation by specific bank staff. There is no legal rationale for nullifying the legal contract. The OP applied for a loan and the funds were issued to him.
Secondly there are no excuses for any internal altering of documentation by bank staff. Unfortunately these bad practises did take place but where bank authorities were made aware of them by either clients or internal audit appropriate action was taken against individuals involved. There is no practise in any bank of ignoring a deliberate falsification of information. The OP has been made aware of such an instance and should immediately report this matter to the fraud department of his bank. He is not at a loss as a result of this fraud, but the bank and the taxpayer is.


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## Gerry Canning (22 Jan 2014)

44brendan.

I would love to share your optomism that Banks will act on a deliberate falsification of information.Sadly the Mortgage books have too much( shall we say suspect info?)What  happened was that issues were not looked at too hard .



I think we fundamentally disagree on this .

ie Doctors differ,patients die ! 
I hope time/experience proves you right ,because I would love to be wrong on this.

No offence intended to genuine Bank people.


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## Bronte (23 Jan 2014)

Gerry Canning said:


> It is very unlikely that Aib will take action on the staff member here. , Too many of AIB staff were at (unusual) practices, opening one case of poor lending will only continue to show the contamination that permeated AIB.(AIB have a lot of form over unethical practices over the years)
> Whilst there is no (reckless lending) law , if Alpha can show loss Aib will be forced to at least try to be fair.


 
My own view is that it was not a case of staff members operating illegally, but of pressure from above to compete and lend as much as possible during the madness. It happened to me in my Bank, Ulsterbank, they were literally in such a rush to lend that all previous checks were thrown out the window, being offered more than was requested, not needing the usual documentation etc. I mentioned on AAM before that I believe my last loan from that is probably not fully legitimate, but you know what, I took the money and I'm paying it back. It wasn't forced on me. I did my figures and borrowed what made added up, not what a bank added up for me. I have a sibling in the same scenario, offered, and I think actually it was AIB, many multiples of salary, told he was mad not to take it etc. Luckily he too added it up and ignored the bank.

When one speaks to bank staff now about what happened those stellar bank performers you find they are quietly pensioned off, or put in a safe department, never to see the light of day again. And you can be sure the bank will defend them and vice versa, we will never find out what really went on. But it came from the top.


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## Alpha002 (23 Jan 2014)

All, thanks for your responses (both sarcastic and honest).

Some points to note about my post:
- I have been trying to come to a resolution with AIB for the past 4 years offering them solutions (such as extensions, selling the property with a write-off on the remaining outstanding balance as the property is in Dublin and on a very good tracker rate, warehousing, etc..). I have been offering these solutions over the past 4 years to no avail. My thoughts are that I offered these solutions 2-3 years back when AIB was not in a position to handle them.
- I am not looking to get "a get out of jail free card".
- I am not a chancer nor am I am AIB.
- I am a middle class person in severe financial distress looking for some advice.
- I am not a strategic defaulter.
- I am not looking for pity, just anything that might assist me in finding a joint solution with AIB.
- I found a discrepancy within my file and sought assistance on this site.

My own personal thoughts are that this is internal fraud within the bank.

My follow on question to the site is as follow:
- Should I raise this point as part of my new negotiations with the bank or should I park it until negotiations have run its course?

Again all advice (both sarcastic and honest) is welcome.


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## Brendan Burgess (24 Jan 2014)

Hi Alpha

The bit which got me on my high moral horse was this bit



> Will this invalidate the loan?



I think it would be well worth your while starting a new thread in the following format 

Standard Format for mortgage arrears Case Studies

My general approach would be to try to focus on the relevant issues. If you try to use an irrelevant issue to resolve your problems, you will be unfocused and unsuccessful. 

Brendan


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## Bronte (24 Jan 2014)

Alpha002 said:


> - I have been trying to come to a resolution with AIB for the past 4 years offering them solutions
> 
> I have been offering these solutions over the past 4 years to no avail.
> 
> ...


 
Firstly we cannot give you any advice whatsoever until you give us your financial details. How can you just pick one thing, something dodgy about the paperwork and ask will that help you. There has been absolutely no evidence so far that will work. But there have been, I'd say in the last couple of years, many strange people and organisations coming out of the wood work claiming they have solutions, and people are actually buying this. I believe they are conning people and we've had enough of this nonsense so perhaps that's why you got such a negative response on here, that combined with the fact in the last week there were quite a few posters taking this tack. 

You say you've offered AIB 4 solutions. Maybe they were sound solutions, but it's also possible they were not. Equally possible is that AIB were not prepared to listen, that does seem to the case, from my own experience and readings, but I believe they are now interested in solutions. So if you come up with a solution that works for them, and you must put yourself in their place, not yours, then maybe you can get through this. But if you're hiding money, trying to discount a spouses income, they know it. So figures please and let's try and help you.

Have you sought help from a professional in your dealings with AIB. You've offered 4 solutions, so I assume you are well capable of understanding the financial mess you are in. But one should always seek a second opinion, that can be a professional, that can be AAM etc. It's good to stand back and let others tell you what they see. It will give you a different prospective. And I'm sorry you are under such stress. So let's try and see if that's possible.


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## dereko1969 (24 Jan 2014)

Alpha002 said:


> All, thanks for your responses (both sarcastic and honest).
> 
> Some points to note about my post:
> - *I have been trying to come to a resolution with AIB for the past 4 years offering them solutions (such as extensions, selling the property with a write-off on the remaining outstanding balance as the property is in Dublin and on a very good tracker rate, warehousing, etc..). I have been offering these solutions over the past 4 years to no avail. My thoughts are that I offered these solutions 2-3 years back when AIB was not in a position to handle them.*
> ...


 
It would seem to me that if you're not in arrears (and you haven't provided any information in that regard) that the Banks (all of them, not just AIB) are not interested.

The "solutions" you've offered AIB are basically write-offs of varying degrees, why would they take these solutions if you're meeting your obligations?

As advised, fill out the template with all your details.


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## mrbea (24 Jan 2014)

Alpha002 said:


> As part of the Freedom of Information Act, I obtained my file. Within the file, I obtained my the underwriter notes and bank manager notes. The underwriter was not keen in approving the loan. It would seem that the Bank Manager made up a security (value of 300K) that I had offered to the bank as security. This seemed to have put the underwriter at ease. The loan was then approved.
> This security never existed and I only found out about it thru reading the internal notes.


 


Alpha002 said:


> My own personal thoughts are that this is internal fraud within the bank.
> 
> My follow on question to the site is as follow:
> - Should I raise this point as part of my new negotiations with the bank or should I park it until negotiations have run its course?


 
I suspect the bank will like you (or others) bringing up this topic as much as the board of the Central Remedial Clinic welcomed enquiries about renumeration and past practices within the top of the CRC.  The thing is, it seems you have been under severe financial stress for years.  What have you got to lose by reporting suspected fraud within the bank and letting some bankers share some stress, if they deserve it?  I think sooner or later you have a moral duty to report it, so that such malpractice will not occur again so easily. 



Bronte said:


> My own view is that it was not a case of staff members operating illegally, but of pressure from above to compete and lend as much as possible during the madness. It happened to me in my Bank, Ulsterbank, they were literally in such a rush to lend that all previous checks were thrown out the window, being offered more than was requested, not needing the usual documentation etc.


 
There is a big difference between offering more than was requested and making up figures on loan approval sheets....especially when as a result of those made up figures decisions were then made which changed peoples lives for the worse. Most bankers did not act fraudulently in their selfish pursuit of targets / bonuses, but imho those who did should face the music. Saying they were just following orders does not cut the mustard. There was supposed to be regulation. Soldiers in a democracy who commit war crimes are as much to blame as their leaders. The truth will out yet.


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## dereko1969 (24 Jan 2014)

mrbea said:


> I suspect the bank will like you (or others) bringing up this topic as much as the board of the Central Remedial Clinic welcomed enquiries about renumeration and past practices within the top of the CRC. The thing is, it seems you have been under severe financial stress for years. What have you got to lose by reporting suspected fraud within the bank and letting some bankers share some stress, if they deserve it? I think sooner or later you have a moral duty to report it, so that such malpractice will not occur again so easily.
> 
> 
> 
> ...


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## mrbea (24 Jan 2014)

dereko1969 said:


> The OP got the loan that they applied for, they have not denied that, therefore whether there was fraudulent activity in relation to the "security" is moot.


 
Moot, according to the dictionary, means something along the lines of "open to discussion or debate; debatable; doubtful". The individual banker who allegely indulged in fraudulent activity would have done so in order for the OP to have got the loan. The OP has seemingly discovered the paper trail which shows the banker did indulge in fraudulent activity. If there was internal fraudulent activity, that cannot be "moot" just because the OP got approved the loan as a result of the "Bank Manager (who) made up a security, value of 300K" 

You could claim that the relevance of the (alleged) fraudulent internal activity in the bank to the OP's loan is "moot", that would be a different point. However imho even if that is moot, that does not excuse such activity within the bank (if it took place) or the need to investigate it.

People investigated the CRC not because they wanted to get their own money back which they may have donated over the years : it was eventually investigated because there may have been some degree of greed, selfishness and wrongdoing at the top of the CRC.


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## Brendan Burgess (24 Jan 2014)

> Moot, according to the dictionary, means something along the lines of "open to discussion or debate; debatable; doubtful".




Hi Mr b

derek used the word "moot" in its most common meaning of irrelevant. 


Whether or not there was a fraud, is irrelevant to the OP's case - he is still fully liable for the loan.


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## mrbea (24 Jan 2014)

Brendan Burgess said:


> Whether or not there was a fraud, is irrelevant to the OP's case - he is still fully liable for the loan.


 
My point was internal fraud in the bank should be investigated, and if necessary punished.   The OP was wondering should he raise "this point as part of new negotiations with the bank or should (he) park it until negotiations have run its course?"   I am wondering should he let the bank investigate it themselves, first at any rate, or else report it straight to the fraud section of the Gardai?


If fraud was discovered and it appears obvious the OP would not have got the loan without internal bank fraud, then imho it is open to debate (moot) if the OP should take 100% of the pain or not.  You are possibly right, the OP may well take 100% of the pain under the law (and wink wink) as it stands in this country, but do you not agree the "bank made up security" case in this particular loan in this particular bank should be investigated anyway?


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## dereko1969 (24 Jan 2014)

mrbea said:


> My point was internal fraud in the bank should be investigated, and if necessary punished. The OP was wondering should he raise "this point as part of new negotiations with the bank or should (he) park it until negotiations have run its course?" I am wondering should he let the bank investigate it themselves, first at any rate, or else report it straight to the fraud section of the Gardai?
> 
> 
> If fraud was discovered and it appears obvious the OP would not have got the loan without internal bank fraud, then imho it is open to debate (moot) if the OP should take 100% of the pain or not. You are possibly right, the OP may well take 100% of the pain under the law (and wink wink) as it stands in this country, but do you not agree the "bank made up security" case in this particular loan in this particular bank should be investigated anyway?


 
No one on here has stated that the matter should not be raised/investigated but it will not make any difference to the fact that the OP was given a loan that they requested and had no problems accepting (at the time).

The OP asked if this would make his/her loan null and void and the answer to that is no.


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## mrbea (24 Jan 2014)

dereko1969 said:


> The OP asked if this would make his/her loan null and void and the answer to that is no.


 The OP has stated he is "not looking to get "a get out of jail free card"", but he has asked should he report the alleged fraud now *or* later - what do you think? Or should he just go straight to the fraud section of the Gardai?


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