when someone took out their original mortgage they would have been stress tested to see if they could afford repayments with a 2% hike in interest rates.
Really? Was testing to meet loan repayments supposed to have been done?
What about a case where the lender lent so much money that the repayments (even at existing interest rates then, without the 2% hike you mention ) were well out of reach of the borrower? For example, if a borrower was mentally unwell (and getting medical care for same) and borrowed so much from the bank that the repayments alone on this one loan were say €50,000 a year more than his total income, what then about the OP's question? Could the mortgage lender be sued for unrealistic loan approval? Surely the mortgage lender should - in its own interest, in the countries interest and in the interest of the lender - have checked to see if the loan was repayable? If it neglected to evaluate an applicants ability to repay, should it not be held responsible....otherwise, why were some / most applicants evaluated on their ability to repay, and this person not?
For example, if a borrower borrowed so much from the bank that the repayments alone on this one loan were say €50,000 a year more than his total income, ?
This doesn't make sense. Can you clarify please.
It is up to the bank to decide whom they wish to lend money to and what criteria they use in reaching that decision.
So long as the comply with the law enforce at the time,
In this particular case the banks got it wrong and their shareholders got wiped out.
The borrower has learnt that over the past 8 years ( and has had his life destroyed), but should the bank employee who made the mistake not also discover that "their decisions have consequences and that in the real world they will be held accountable for those decisions". Should the bank not check to see if a borrower remotely has the ability to repay, or some plan or projections to repay the money? Surely the shareholders would expect that in any bank?people are learning in a very painful way that their decisions have consequences and that in the real world they will be held accountable for those decisions.
Honest, why have you dug up an old thread
yes. Certified earnings were much less than mortgage repayments. There was however no business plan or projections. The borrower was told the bank would evaluate if the mortgage was viable ("they were the experts") but it clearly did not.Do you know all of specific details of this alleged victim's loan application? Have you seen their application and all of the supporting documentation - eg. accountant's report, certified earnings, business plan / projections etc?
The documentation is immaculate and impressive, and the person is no longer on heavy medication / attending consultant psychiatrist. It will make an excellent test case. The question remains: is the lender supposed to evaluate the borrowers repayment ability ( for the mortgage amount ); and could the mortgage lender be sued for unrealistic loan approval?Or are you simply taking the word of someone who by your own assertion is not entirely mentally capable?
The documentation is immaculate and impressive, and the person is no longer on heavy medication / attending consultant psychiatrist. It will make an excellent test case. The question remains: is the lender supposed to evaluate the borrowers repayment ability ( for the mortgage amount ); and could the mortgage lender be sued for unrealistic loan approval?
In answer to the main thread you can't sue for reckless lending but you can sue for negligence and breach of duty of care
Same in this case, except they will not provide any paperwork to show they they evaluated the borrowers ability to repay at all. The accountants figures show that the borrowers income - at any stage in his life - was only a fraction of what would have been necessary to pay the mortgage. Is the borrower entitled to ask for the complete file from the lender, showing the lenders calculations ( if any ) showing the borrower could meet monthly repayments?.the Bank in question won't provide any paperwork to back up they done it correctly
Yes, see Section 4 Data Protection Act 1988 to 2003.Is the borrower entitled to ask for the complete file from the lender, showing the lenders calculations ( if any ) showing the borrower could meet monthly repayments?
Yes, see Section 4 Data Protection Act 1988 to 2003.
A customer is entitled to ask for a a copy of the personal data the business holds on them, that is all. According to the law, like any business, the bank is required to hold only data necessary for the operation of it's business, in other words the finally signed contract, nothing else. Most businesses have a policy which requires the destruction all unnecessary data, so it is very unlikely that you will find much if anything relating to the decision itself.
The bank has a responsibility in law to make sure a person has capacity to act so if they knew of mental problems there is a higher duty of care.
A friend of mine had a dispute with the EBS recently and a solicitor recommend she ask for all the data and correspondence in her file. They dithered but eventually sent her everything and she even got given internal emails where her case was being passed around, and some very detailed info was sent to her. After she got the wad of documents, the bank backed off on their dispute (regarding a condition of the loan)