What if bank adds 60k to borrowers salary on loan application?

[Leo]

Correct, and in this case, it could be excluded debt, if it is "debt or liability of the debtor arising from a loan (or forbearance of a loan) obtained through fraud, misappropriation, embezzlement or fraudulent breach of trust". Hence it is better to have the loan report and valuation explained or investigated. Thank you.

Perhaps, that all depends on the role your friend played here. We have all heard stories of people who were encouraged by a mortgage broker to put down on the form that they intended to rent a room, or other what they considered 'while lies', it might be argued that these people obtained these loads through fraud.

If you friend played no such part whatsoever in any misrepresentation, then to my mind they did not obtain the load through fraud. The bank may have broken rules in terms of providing the loan, but that's a different matter.

 

[usernameinuse]

Perhaps, that all depends on the role your friend played here. We have all heard stories of people who were encouraged by a mortgage broker to put down on the form that they intended to rent a room, or other what they considered 'while lies', it might be argued that these people obtained these loads through fraud.

If you friend played no such part whatsoever in any misrepresentation, then to my mind they did not obtain the load through fraud. The bank may have broken rules in terms of providing the loan, but that's a different matter.

Room rental was never mentioned, but in any case room rental in an oldish house in such a rural location would not have come anywhere close to 60k. I agree it is best to establish if a bank official or officials were guilty of fraud or whatever in approving the loan, and to establish the borrower had no knowledge or part or act in same. The loan would not have been approved if the bank had used the P60, payslips etc the borrower submitted, and a valuation with basic facts correct.

 

[Leo]

Room rental was never mentioned...

I only stated that as an example of where a borrower might be complicit as it was a tactic used by some brokers to obtain approval for greater amounts, regardless of the area.

 

[usernameinuse]

I only stated that as an example of where a borrower might be complicit as it was a tactic used by some brokers to obtain approval for greater amounts

Fair enough. Even if potential room rental (draughty oldish 3 bedroom rural house) was included in the borrowers salary,and there is no mention it was, it would only account for maybe 5 or 10% of the over €60k the bank added in the loan report. The P60 and payslips showed the borrowers salary exactly. I agree further clarification or investigation is necessary.

 

[Leo]

Fair enough. Even if potential room rental (draughty oldish 3 bedroom rural house) was included in the borrowers salary,and there is no mention it was, it would only account for maybe 5 or 10% of the over €60k the bank added in the loan report. The P60 and payslips showed the borrowers salary exactly.

Again, it was only mentioned by way of attempting to explain an example of a borrower potentially obtaining a loan through fraud, and how that is different to a bank manipulatingnumbers to arrive at a figure the borrower is looking for.

I agree further clarification or investigation is necessary.

You know you're just agreeing with yourself there?

 

[usernameinuse]

Again, it was only mentioned by way of attempting to explain an example of a borrower potentially obtaining a loan through fraud, and how that is different to a bank manipulatingnumbers to arrive at a figure the borrower is looking for.

And that is precisely why clarification from the bank, or investigation in to the bank, is necessary to determine what happened, and why the loan report had over 60k added to the borrowers salary, why the valuation had basic facts wrong. 5 bedroom instead of 3 bedroom, double glaze instead of all but one windows single glazed etc.
If there is a suspicion of fraud or wrongdoing, it would be best to establish who was at fault, as the PIP said that debts arising from a loan obtained through fraud or similar wrongdoing are not suitable for a PIA.

 

[RedOnion]

Do you want to help your friend, or just looking for people to agree that bankers and valuers should all be put in jail?

You've got more valid advice than appears in most threads, but you don't appear to be listening to it.

For example, one of the posters above has posted under his actual name. If you really wanted to help your friend, you'd take 2 minutes to Google his name and realise it might be better to consider his advice than argue he doesn't understand the intention of the word 'obtained' in legislation.

Just my 2 cents.

 

[usernameinuse]

The advice was for my friend to go to a PIP. She has done so with a well respected one and I understand has a second meeting arranged with him. I think she or the PIP may be getting further or second opinion, I'll leave that up to them.

No I do not think "bankers and valuers should all be put in jail"! What put that in your head? The vast majority of them behaved and behave honestly and ethically, same as most other professions.

 

[Palerider]

Brokers enhanced applications, added such items as overtime suggesting it was ' guaranteed overtime ', when you had a system that rewarded brokers with a percentage of loan drawdown as their commission income well you had a dysfunctional relationship, it was all ok back in the day but in retrospect it was daft.

Banks want to lend their money to people that are good repayers of previous loans, when figures are inflated so that applicants get their loans when in reality it would be a struggle then it hurts all of us.

 

[Leo]

If there is a suspicion of fraud or wrongdoing, it would be best to establish who was at fault

If, as you say, there were issues with the bank's internal processes, that's their problem. What has your friend to gain going down that particular rabbit hole? It won't be news to the bank that data on such forms was manipulated. As Palerider suggests above it happened all the time. You/ your friend need to focus on how best to move forward and not get too invested in the prospect of any enquiry ever looking into this in any detail.

 

[usernameinuse]

As Palerider suggests above it happened all the time.

What happened all the time? A nurse submitted per P60 , payslips etc and a banker added over 60k on to her salary on internal loan reports so he could mislead his superiors / sell the mortgage / have the nurse borrow maybe 12 or 15 times her salary and have her life changed for the worse as a result, as he knew, or should have known, would happen? A valuer got even basic facts wrong on a valuation? No, that did not happen "all the time". Bank shareholders and the public deserved better. As someone said, if such activity is not identified and punished, it may happen again. Like a supermarket correcting sacking an employee for stealing and eating a mars bar, if the line was crossed, the line was crossed.

If the borrower engaged in fraud in obtaining the loan then she cannot get a PIA. She has indicated she thinks it would be no harm to know before entering in to a PIA who was involved in having the loan report or valuation altered, or if there was fraud involved, rather than possibly 4 years in to a PIA. Anyway, she is due another meeting soon, let her ask or clarify those questions.

 

[Leo]

a banker added over 60k on to her salary on internal loan reports so he could mislead his superiors / sell the mortgage / have the nurse borrow maybe 12 or 15 times her salary and have her life changed for the worse as a result,

So your friend actually wanted a nice small affordable mortgage, to buy a house within her means but a greedy mortgage broker put a gun to her head and forced to to borrow far more than she wanted to, and to buy a more expensive house than she intended?

Your sole focus here seems to be directed at seeking a witch hunt to out and punish the individuals involved. That will get you or your friend nowhere. Manipulation of data on these forms at one level or another was common, indeed, it is still happening though perhaps to a lesser degree.

 

[usernameinuse]

Manipulation of data

Do you think a banker adding over €60,000 on to a nurses salary on internal loan reports, a valuer getting basic facts wrong ( 5 bedroom instead of 3 bedroom, double glazed instead of all but one single glazed etc ) was just "manipulating data ", given the true data was very different ( the P60 and payslips supplied etc )? And you think its ok if "it is still happening,though perhaps to a lesser degree" as you claim?

If the borrower "was in on" any fraudulent activity or wrongdoing then a PIA would not be allowed. I think that is why she feels it would be best to know what happened before a PIA rather than possibly 4 years in to a PIA. She would also like to know that what happened to her will not happen to anyone else. She has not married or had kids or even socialised much as a result of financial worries since taking out the loan, having had her data manipulated unknown to her over a decade ago. Why was the data manipulated? Why did her own bank, who refused her a loan for a much lesser amount, not manipulate data?

 

[elcato]

Do you think a banker adding over €60,000 on to a nurses salary on internal loan reports, a valuer getting basic facts wrong ( 5 bedroom instead of 3 bedroom, double glazed instead of all but one single glazed etc ) was just "manipulating data ", given the true data was very different ( the P60 and payslips supplied etc )? And you think its ok if "it is still happening,though perhaps to a lesser degree" as you claim?

Yawn. You keep repeating the same garbage instead of actually listening but maybe someone will give you a hug eventually.

 

[usernameinuse]

You keep repeating the same garbage ..

No, actually I was just replying to the poster before that, who came up with the astonishing claim for the first time that "it is still happening though perhaps to a lesser degree". If you or he have insider knowledge of such practice, I suggest you report it to the relevant authorities.

 

[Leo]

Do you think a banker adding over €60,000 on to a nurses salary on internal loan reports, a valuer getting basic facts wrong ( 5 bedroom instead of 3 bedroom, double glazed instead of all but one single glazed etc ) was just "manipulating data "

Yes, that's manipulating the data, it was common. Non one will be surprised to hear that. Was your friend coerced into taking on a larger mortgage or buying a more expensive house than they initially intended?

I think that is why she feels it would be best to know what happened before a PIA rather than possibly 4 years in to a PIA.

I think it's clear to most who have tried to advise you here that the likelihood of your friend ever getting that level of detail is very close to zero. Even if a full investigation occurs into the internal practices of the bank and this broker, your friend will not be entitled to the findings.

She has not married or had kids or even socialised much as a result of financial worries since taking out the loan, having had her data manipulated unknown to her over a decade ago.

You mean she put her entire life on hold the day she took out the mortgage that she requested? Even the whole of the first 10 years when she was paying interest only? She didn't do any basic research or seek independent advice on all that time?

Why was the data manipulated?

Quite simply, to give her what she asked for.

Why did her own bank, who refused her a loan for a much lesser amount, not manipulate data?

Why did your friend not question why another institution was offering her so much more than her own back was? Why did that not sound alarm bells? What questions did she ask or did she just bury her head in the sand, grab the money and run?

 

[usernameinuse]

the credit approval process in most banks is pretty rigorous, involving several sign offs at different levels and the credit risk officers are very experienced. So the idea that someone could add 60K to a nurse's salary and that it would go unquestioned over several reviews, seems highly unlikely.

Most people would agree with you, it was highly unusual. However, according to Leo, it was "common".

Yes, that's manipulating the data, it was common.

Come off it Leo! That scale of fraud or wrongdoing was not common.

You mean she put her entire life on hold the day she took out the mortgage that she requested? Even the whole of the first 10 years when she was paying interest only?

She paid quite a lot in variable interest rates in those 10 years. She also knew if she sold the house it was not worth a fraction of what the valuer would had valued it at, and was dismayed many years later to see he had got even basic details factually incorrect.

Quite simply, to give her what she asked for.

She did not ask for the data to be fraudulently changed or "manipulated" as you call it. In fact she had no knowledge of that until she saw her file many years after taking out the loan.

What questions did she ask or did she just bury her head in the sand, grab the money and run?

She asked what the interest and capital repayments would be, and was not told, just that the bank were the mortgage experts and had decades of experience and she could afford it, or she could roll over the 10 year interest free period for another 10 years at the end of the first 10 year period. Perhaps the only people who grabbed the money and ran were the banker and his relation the valuer, who misled people higher up in the bank, and the bank shareholders? They have since resigned or no longer work for the bank.

 

[Leo]

She asked what the interest and capital repayments would be, and was not told,

Of course she wasn't. The broker had no way of knowing what interest rates would be in 10 years. This question has been answered multiple times already.

But you still maintain she put her life on hold for the 10 year duration while she was paying interest only. Did she expect payments would go down?

 

[usernameinuse]

Of course she wasn't. The broker had no way of knowing what interest rates would be in 10 years.

Of course not, but the banker did not indicate what monthly capital and interest repayments would be if interest rates were, for example 4%, or 6% or 8%. No indication of what they could be or were likely to be at all. Rolling over the 10 year interest only period was mentioned as a possibility by the banker though. I believe not all banks operated like this, certainly mine did not when I took out a mortgage.

 

[dub_nerd]

This is beyond ridiculous. You want the bank to do financial modelling for customers? They might apply a stress test (but not back in 2007). As I mentioned before, on an interest-only loan it's not rocket science to calculate 4%, 6% or 8% of the total. It's basic multiplication. If the customer isn't able to figure it out for themselves they're probably in trouble from the get go. Though I notice they can do their two-times tables because they know they were given twice as much as another bank was prepared to lend. If they did nothing with that information, what do you think they would have done with the financial models you're imagining they should have got?