Prime Time will feature sub-prime mortgages tonight

[charliemacck]

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!

 

[sandymount]

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

 

[Jimbob2]

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.

 

[webtax]

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?

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.

 

[brodiebabe]

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.

 

[Towger]

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.

 

[F. Kruger]

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.

 

[JR Rizzo]

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.

 

[Jimbob2]

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!

 

[F. Kruger]

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.

 

[DerKaiser]

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

 

[Jimbob2]

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.

 

[BK0001]

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?

 

[Jonathan.OB]

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.

 

[Afuera]

Valuers do not inflate purchase prices nowadays.

Nowadays? When was this practise stopped?

 

[sherib]

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.

 

[ontour]

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]

 

[Afuera]

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.

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?

 

[Brianne]

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!!!

 

[Afuera]

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.