Sue mortgage lender for unrealistic loan approval?

[mrbea]

The bank should have known the borrower would struggle to pay it back but still signed.

Actually documentation from the file show that the bank knew the borrower could not pay it back, but under pressure from the broker it slipped through the net anyway. The building society in question was not experienced in dealing with brokers, or at least this broker, and I believe the building societies relationship with this broker did not last long.

So the borrower signed a form without checking it's accuracy?

Any information on the application form was correct. However certain information was left unfilled / unanswered, and is still unfilled / unanswered on the copies of the application form. The borrower trusted the mortgage broker because that individual said they were the experts in financial matters, and the borrower knew the broker. Hardly the borrowers entire fault that he found out years later, to his surprise and shock, that the broker had supplied fraudulent information to the building society, and that the building society made no attempt whatsoever to check it?

 

[peteb]

Please! There is no one that walked into a brokers in the peak of the boom and didn't know what was done on their behalf. That's right - the mortgage broker works on behalf of his client the borrower. If the borrower was unsure then he shouldnt have drawn down the funds.

 

[Sunny]

Please! There is no one that walked into a brokers in the peak of the boom and didn't know what was done on their behalf. That's right - the mortgage broker works on behalf of his client the borrower. If the borrower was unsure then he shouldnt have drawn down the funds.

Absolutely. Indeed the brokers sold themselves on the fact that they knew how each bank carried out underwriting and what they looked for so they could maximise the mortgage that could be borrowed.

 

[Gerry Canning]

peteb;

With respect , do not be so hard. A lot of people relied on (their) broker to get them a (flawed) dream. A lot of people (in hindsight) were (stupid) .
Most people are unsure of what they sign. Most people trusted the (professionals) they were dealing with.
As these (professionals) were regulated? it was not for the consumer to 2nd guess these professionals.
Of course the client was (unsure) and of course with hindsight he should have been more careful.

I would suggest that in the (fluffy) times the Broker was more interested in Commission rather than his customer.

 

[peteb]

Gerry

With all due respect, isn't your background banking? So surely you should have some insight as to how the banks handled matters.

It is always for a consumer to be aware, no matter what professional they engage. If somebody came to me and said "great news, I can get you 500k. It's going to cost you €2,500 a month to repay". If I was earning €2,600 a month I would have thought to myself how am I possibly going to pay this back?! As opposed to powering along and just taking it as a professional told me its fine!!

 

[Jim2007]

The building society lent the borrower ( whom it never met ) money the borrower had no means of repaying, because the broker supplied false information to the building society.

The broker acts as the agent of the borrower and the building society acted in good faith based on the information supplied, so do you think they are at fault???

Your evidence suggest is that the broker failed to act according to your instructions or lack of instructions, so if you have any case, it is against the broker not the building society!

 

[Gerry Canning]

peteb;

You are right , but I left banking 20 years ago. At that time as part of my Professional Competency I was required to test affordability . Stories in the (fluffy)times of 6+ income mortgages meant affordability went out the window..
I have mostly been in asset finance since then . The Rules (for me) remained the same ,if the customer was not able to afford ,I did not do the deal.

People did not just power along , they were driven along . Yes they were stupid/naiive/optomistic , but surely Mr Banker/Mr Broker as regulated entities bear responsibility.
From what I see , WE are all on the Hook for Billions we have put intoBanks to sort miss-lending like this.
Had ONE assistant-manager been jailed in circa2006 ,we would NOT be in recession.
Anyway , sermon over!!!!

 

[peteb]

Yes there was mortgage of 6 x income. I got approved for 6 times my income and then had a guarantor for more on top of that. At the time I got €266,000 on a salary of €30,000. My repayments were about 40% of my income. People said stretch yourself further and buy the biggest you can. I didn't. Because I had an idea of what I could afford and couldn't. People need to take ownership of their own decisions.

 

[Bronte]

Your evidence suggest is that the broker failed to act according to your instructions or lack of instructions,

I didn't get that view at all.

And based on what I heard everybody talking about at the time of all the crazy borrowing, people were vying with each other to have the best falsified accounts, forged P60's, most crooked broker..... It was unbelievable. People on low incomes, driving fab cars, borrowing to go on holidays while queuing up to outbid each other on houses yet to be built, and they didn't want 80% or 100% oh no. And the credit card companies sending unsolicited cheques to people to spend spend spend. And that's exactly what they did.

 

[peteb]

I'd have to agree with Bronte. P60 and crazy income certs which people asked their employers to doctor were 10 a penny in the boom. And that wasn't brokers or banks, that was people knowing what they were doing!

 

[Gerry Canning]

peteb; Bronte

Yup, If anyone ie Banks/customers/advisors/agents/accountants had applied rudimentary caution we would not be in the unholy quandary we are wading through .

The Whole Herd instinct came in.

Hope we succeed in sorting.

 

[mrbea]

The broker acts as the agent of the borrower and the building society acted in good faith based on the information supplied, so do you think they are at fault???

Because the broker in this case acted fraudently and because the building society accepted all information without checking any of it, yes I think they bear some responsibility. Even with the figures the broker supplied to the building society the borrower still could not afford the mortgage, but it still slipped through the net. The german banks who lent to our banks "in the day" thought there was some regulation in this country.

P60 and crazy income certs which people asked their employers to doctor were 10 a penny in the boom.

If you have knowledge of fraudulent behaviour by employers in relation to taxation matters you should inform the revenue. I believe most employers acted and act honestly and responsibly, as do most brokers.

Yes they were stupid/naiive/optomistic , but surely Mr Banker/Mr Broker as regulated entities bear responsibility.
From what I see , WE are all on the Hook for Billions we have put intoBanks to sort miss-lending like this.
Had ONE assistant-manager been jailed in circa2006 ,we would NOT be in recession.

Correct, and the most sensible thing that has been said about the whole mortgage crises / Irish recession in a long time.

 

[Bronte]

Even with the figures the broker supplied to the building society the borrower still could not afford the mortgage, but it still slipped through the net.

And still you won't answer why the borrower took the money when he couldn't afford it?

If you think you're going to win a legal case based on what you've posted on here I'd say you haven't a chance in hell. In summary your case being 'I borrowed the money, I couldn't afford it, the broker lied, and the bank didn't check anything,' that's your case, so far.

 

[mrbea]

And still you won't answer why the borrower took the money when he couldn't afford it?

You would need to ask the borrower that but I believe its because he was very foolish, got carried away, liked the property, trusted the broker and "sleepwalked" in to it as easily as the broker and building society approved the loan / told him he could afford it. The borrower was not very good with figures. I guess he trusted the broker and building society, who told him they were the financial experts. The building society was expert enough to calculate he could not afford the mortgage ( even with fraudulent figures and letters from the broker ) but they were not expert enough to tell him that. Some sales people can be very polished and persuasive you know, they are trained and expert at that. Surely you got sales training too?

 

[44brendan]

I'm not sure what your agenda is here. You have raised a number of valid points in respect of the the incompetence/malfeasance of come brokers in supplying incorrect information to banks and poor practises by banks in not proprely checking the information supplied. However those practices are not sufficient to take legal proceedings against a lender, while would require you to prove that the contract entered into between the lender and the bank was in some way flawed. This has been tried before unsucessfully. Perhaps morally the Banks should be held accountable for these sort of actions, but unfortunately there is no legal obligation upn them to properly assess the financial circumstances of borrowers. The arguement that "There should be a law against it" doesn't hold up to well in the courtroom

 

[mrbea]

Perhaps morally the Banks should be held accountable for these sort of actions, but unfortunately there is no legal obligation upn them to properly assess the financial circumstances of borrowers.

Is there a legal obligation on brokers to not knowingly supply fraudulent information about a buyers circumstances / write pages about the borrower which the borrow did not know about?

I realise in this country there was no regulation and its ok for a building society to advertise themselves as "financial experts", and yet sell a mortgage to a borrower who could not - by the banks own written admission - afford the mortgage.

 

[Gerry Canning]

mrbea;

There always was and is a legl/lawful obligation on Broker to supply genuine information.
They can write pages on Borrower provided they believe said information to be true.

There was always Regulation on Building Society. Namely there were always under the Prime Rule of (acting in the best interests of the Consumer and the Integrity of the Market)
If Building Society admits to giving an unaffordable mortgage , then they have seriously weakened their case for full repayment.
How can they go to Court and then claim all funds due ?

 

[Sunny]

I think this thread has died a death at this stage....

 

[Gerry Canning]

Amen.

 

[Jim2007]

I didn't get that view at all.

My underlining:

Have seen a file which was got, and it shows that the building society knew the person borrowing the money had not the income to repay the mortgage, but it lent the money anyway. It also shows correspondence between broker and building society, which gives false and misleading information about the borrower. The borrower did not give or sign this false information. The broker also claimed the borrower had loan approval from his own bank, which was not true, and urged the building society that it should try to "win" the business.