Bank Made Up Security

A

Alpha002

Registered User
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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.
 
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
 
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......
 
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.
 
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.
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Spoilsport!
 
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.
 
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.
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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 :D
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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.
 
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.
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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.
 
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.
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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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Sunny said:
They are the victims.
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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.
 
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.
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Sunny has made it quite clear that it is the banks who are the victims, not the bankers.
 
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.
 
Brendan Burgess said:
Sunny has made it quite clear that it is the banks who are the victims, not the bankers.
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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.

 
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"?

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