should a bank or brokers explain lending criteria from 8 years ago?

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abagail

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In the case of a buy to let, can a borrower get a bank / mortgage brokers to explain its lending criteria from say 8 years ago? The borrower in this case could not afford the repayments even then, or since. The repayments were actually higher than the persons income and rent combined. Should the bank or mortgage brokers not have checked on the borrowers ability to repay?
Can the borrower force to bank / mortgage broker to show their calculations or projections or assessment of the borrowers ability to repay the mortgage?
 
abagail said:
The borrower in this case could not afford the repayments even then, or since. The repayments were actually higher than the persons income and rent combined.
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That makes no sense even in the tiger years that would surprise me.

What about the borrower,why on earth,assuming any bank would lend at that criteria,borrow that stupidly...how on earth did they even make the first repayment? every cent of their monthly salary and every cent of rent and still couldn't make a repayment from day one?
 
abagail said:
In the case of a buy to let, can a borrower get a bank / mortgage brokers to explain its lending criteria from say 8 years ago? The borrower in this case could not afford the repayments even then, or since.
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Wasn't the buyer of the investment property party to the figures that went down on the mortgage application form? I cannot see how you have any comeback. Were the figures falsified. The income figure for the P60 or the potential rental income in particular.

If you haven't been able to afford the repayments for the last 8 years were you in arrears from month 1 and is the bank not repossessing the property.
 
It might be more interesting to get a copy of the application form to see what income etc was put on the form. A copy of the application can be requested and got quite simply, it's done all the time for mortgage interest supplement application.

I would suspect shenanigans of some sort with the info provided, bad and all as the banks were there was some sort of criteria in place and the figures had to fit the boxes, so maybe the figures given were not quite accurate!
 
Hi Abagail
You make a very interesting point there are 2 items you need here
1) A copy of the original loan application
2) The underwriting sheets attaching to your loan application
These underwriting sheets accompany all applications for sign off in the loans dept of each lender and could make for 'interesting' reading. On receipt of these two items you might have a clearer picture. I have a belief that alot of investment loans were underwritten on an interest only basis
Padraic
 
abagail said:
In the case of a buy to let, can a borrower get a bank / mortgage brokers to explain its lending criteria from say 8 years ago?
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But as you have pointed out in another thread, you are statute barred from taking legal action anyway.

And as wbbs and Bronte have pointed out, surely you knew the figures yourself when you were applying for the loan?

If the rental income covered the interest payments and the loan was on interest only, then it's fair enough.

If the interest-only period was for 5 years, then there could be a case. But I don't think anyone has taken a case for reckless lending in the Irish courts.
 
PadKiss said:
Hi Abagail
You make a very interesting point there are 2 items you need here
1) A copy of the original loan application
2) The underwriting sheets attaching to your loan application
These underwriting sheets accompany all applications for sign off in the loans dept of each lender and could make for 'interesting' reading. On receipt of these two items you might have a clearer picture. I have a belief that alot of investment loans were underwritten on an interest only basis
Padraic
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Thanks for that.
1) A copy of the original application form was obtained ( after much delay from the bank) ; it verifies everything I have said already.
2) I never heard of underwriting sheets before : does the borrower have a right to these? I assume they are sheets which were supposed to have been completed showing (and calculating figures?) the borrowers ability to repay?
3 ) correct, the first number of years were offered interest only, before interest and capital.
 
Hi Abagail yes you are entitled to request the underwriting sheets relating to your loan especially if you are putting together a complaint as these pages could be of importance to your argument. Padraic
 
But as the borrower, you would have known it was a fixed period interest only deal. How could it be that you would not have thought of 5yrs down the road?
 
Luternau said:
But as the borrower, you would have known it was a fixed period interest only deal. How could it be that you would not have thought of 5yrs down the road?
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Can only imagine that flipping was the exit strategy but 2006 got in the way?
 
This was obviously a poor lending decision, but not unlike significant numbers of simiar cases. There will be no retribution in Court for banks or brokers in respect of this type of decision. Unfortunately you will be wasting your time taking on any bank, on the back of a poor lending decision or information that was incorrect. There may be some case against the broker if he provided information that was totally incorrect, but as brendan says you are now statute barred from taking an action, even if there was scope of success.
 
Luternau said:
But as the borrower, you would have known it was a fixed period interest only deal. How could it be that you would not have thought of 5yrs down the road?
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lol. I sometimes wonder about the borrower as well, but I think it fair to say he was not brightest. Not by a long shot. He will admit that himself, he left school early and afaik has no qualifications, does menial work etc. You will get some people in the population like that, everyone has relations like that I bet. The borrower says he was assured the loan repayments were affordable from his income. He did not realise what the repayments were until it was too late, and he even had to use up savings to pay interest only. As a novice he even though all mortgage payments on the buy to let were tax deductible ffs - dunno where he got that idea.

The bank was supposed to look not just 5 years down the road, but 5 months as well. They were the so called financial experts ; why did they omit to do that? I suppose in all trades / professions / projects you get the odd rogue or mistake. I doubt it would happen now.
 
Hi abagail

If your friend has learning difficulties and the bank knew about this and exploited them, then he would probably have as good a case as any. It would be the type of case which would make a good test case for irresponsible lending. It would be hard to win, but it would be a lot better than most cases which are simply cases of buyer's regret.

How did he come to buy the property in the first place? Did he initiate it or did someone encourage him to buy and borrow?
 
abagail said:
As a novice he even though all mortgage payments on the buy to let were tax deductible ffs - dunno where he got that idea.
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He was correct,on an interest only mortgage all the payments could be written off against rental income,that changed in more recent budget 2009? where only 75% of interest payments could be written off.

On a interest and principal mortgage where you pay back both the interest and the outstanding amt owed over a fixed term ie 20 years,only the interest is deductible.

IO mortgages were sold on the basis of efficient tax planning.
 
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