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

[Sophrosyne]

Look, it is really down to the purpose of your posts.

If it is to have the bank official and the valuer prosecuted, having read the various contributions from posters and your responses, I would have said do as you see fit and see how you get on.

However, it is not really your decision is it? You won’t be the one taking action. One way or another you will have nothing to lose, except perhaps your friend.

 

[dub_nerd]

My friend did not believe that bankers could mystically see in to the future to predict salaries, interest rates etc. The banker would and could not say what interest rates would be in 1, 2, 5 or ten years. That was the excuse he used for not telling the borrower what her capital and interest repayments would be. As said already, the banker assured the borrower, when he would not tell her what the capital and interest repayments would be, that she could afford them...

So this is even sillier on your friend's part. The banker told her that he didn't know what future interest rates would be, yet he told her she could afford them? What gombeen would conclude anything other than he was having her on? You are compounding the view that your friend hadn't an ounce of common sense.

The bank described themselves, and advertise themselves as mortgage experts with decades of experience.

Nobody could be unaware that houses prices have gone down in the past and could again in the future. At the time your friend bought there had already been two major printed/documentary items that caused national furores over the prospect of an imminent price collapse.

If the bank had put her on a tracker she would not have spent almost 200k.

The bank was under no obligation to offer her a tracker, nor were trackers necessarily the best option at that particular time. If she was affected by the tracker debacle she would be entitled to redress and I presume she isn't. So this is a complete irrelevance.

The banker said she could roll over the interest only period.

And pay another 200k in interest? Why on earth would that be a good thing?

She was not even told what her mortgage repayments would be (capital and interest) before she took out the mortgage.

But they're not hard to work out, or to ask someone else to do it, and a six year old would understand that the repayments must go up not down.

She maintained the property and she paid almost 200k in interest. What more do you want her to do?

It's her property. I would hope she'd maintain it. The bank just has a mortgage over it. She paid the interest she signed up to pay, in full knowledge. You make it sound like she was doing someone a favour. What the bank wants her to do is pay what she agreed.

Now dub nerd I have answered your questions, perhaps you can answer one of mine, asked earlier. Do you think punishment is needed (for the banker and his relation, te valuer he appointed), just as a shop employee who stole a €1 bar of chocolate from his employer was severely punished? Do you think the banker could have added over 60k to the nurses salary on the loan report by mistake? Not very likely, given the nurse supplied P60, payslips etc? And over 60k would be a huge increase on a nurses salary anyway surely?

No, I think your story about the banker is probably believable. I believe they conspired to give her a bigger mortgage than she should even have got. Yes, I'd love to see them punished and everyone else who stoked the bubble. Your friend was part of that, but she's going to pay a heavy price. Just because I think the banker deserves a kick doesn't mean it's going to happen. In fact I don't think there's the remotest chance of it ever happening. And if it did, it wouldn't help your friend one iota. She's got more things to worry about right now.

So here's another question for you -- what do you hope to achieve here by banging on endlessly about the misdeeds of the banker?

 

[Sarenco]

Your friend was obviously incredibly imprudent, perhaps even stupid, to take out such a big loan relative to her means.

But that's history. She now has to deal with the consequences of her appalling decision.

Ranting and raving about "rogue bankers" doesn't help a jot. Your friend is still liable to repay the loan that she signed up for regardless.

 

[usernameinuse]

The banker told her that he didn't know what future interest rates would be, yet he told her she could afford them?

He said he expected them to go down. Yes tracker rates have come down, but variable rates are still high.
All other people I ever met were told what their repayments (capital and interest) would be before they took out their mortgage. Mine certainly were.

Nobody could be unaware that houses prices have gone down in the past and could again in the future. At the time your friend bought there had already been two major printed/documentary items that caused national furores over the prospect of an imminent price collapse.

Hindsight is wonderful. On 4 July 2007, the Toiseach stated at a conference that he did not understand why people sitting on the sidelines, "cribbing and moaning" about the economy, did not commit suicide. Many bank economists, media commentators, estate agents, property developers and business leaders went on the record to state their belief that the Irish property market was healthy.

I believe they conspired to give her a bigger mortgage than she should even have got. Yes, I'd love to see them punished and everyone else who stoked the bubble.

Well, Iceland is a country with a population of only about 330,000, but yet dozens of bankers have been jailed there. A popular and successful move there, by all accounts.

what do you hope to achieve here by banging on endlessly about the misdeeds of the banker?

The borrower made mistakes, but so did the banker. Perhaps other people can be saved from such banking wrongdoing in the future?

 

[dub_nerd]

Nobody could be unaware that houses prices have gone down in the past and could again in the future. At the time your friend bought there had already been two major printed/documentary items that caused national furores over the prospect of an imminent price collapse.

Hindsight is wonderful. On 4 July 2007, the Toiseach stated at a conference that he did not understand why people sitting on the sidelines, "cribbing and moaning" about the economy, did not commit suicide. Many bank economists, media commentators, estate agents, property developers and business leaders went on the record to state their belief that the Irish property market was healthy.

You truly have to be kidding. The government and vested interests talking up the economy? Has it ever been any other way? The fact of the matter is that rumours abounded about an imminent collapse. That's why the vested interests had to respond. Even The Late Late Show featured several potential young borrowers and asked them how scared they were of a price collapse. You're not going to tell me they can't get The Late Late Show in rural Ireland now, are you? Anyway, none of that is relevant. If your friend thinks Bertie Aherne talked her into an unsuitable mortgage along with the banker, let her sue him too. It won't help her.

what do you hope to achieve here by banging on endlessly about the misdeeds of the banker?

The borrower made mistakes, but so did the banker. Perhaps other people can be saved from such banking wrongdoing in the future?

Newsflash for you -- your warning about rogue bankers is ten years too late. The rest of us suffered the consequences, paid the hiked up taxes, and took it on the chin. Your friend did too obviously. As for people overpaying ridiculously for property -- that hasn't changed as people are doing it again. This time the banks are probably protecting themselves a bit better (though not enough in my opinion). No matter. Your warning is neither timely nor especially useful.

 

[Sarenco]

Perhaps other people can be saved from such banking wrongdoing in the future?

But your friend didn't suffer any harm as a result of this alleged "wrong doing". She got the loan she wanted.

Now she has to take responsibility for her appalling decision.

 

[usernameinuse]

But your friend didn't suffer any harm as a result of this alleged "wrong doing".

Financially she did. If the banker had behaved as they promised to, and if they had not added 60k to her salary on her loan report, and used a false valuation, the borrower would not be in the position she is in. She would not have suffered such a huge loss, which was forseeable to the mortgage experts.

She got the loan she wanted.

But not a loan suitable for her needs, not by a long shot.
If a patient of the nurse "wanted" certain medication, and the nurse fraudulently altered documentation and gave her patient medication unsuitable to their needs, which changes the patients life forever, would not the nurse have questions to answer?

 

[Sarenco]

Financially she did. If the banker had behaved as they promised to, and if they had not added 60k to her salary on her loan report, and used a false valuation, the borrower would not be in the position she is in. She would not have suffered such a huge loss, which was forseeable to the mortgage experts.

Didn't she apply for the loan? Didn't she get what she wanted?

The fact that she was insane to look for such a big loan is her issue. The bank has no responsibility to look after the borrower's interests.

 

[usernameinuse]

Didn't she apply for the loan? Didn't she get what she wanted?

Yes, and it was on the understanding that she submitted her P60, payslips etc to the bank for them to evaluate her suitability for a loan. They told her they done a loan report and she was suitable for a mortgage and could afford it. They did not tell her they fraudulently added over €60,000 to her salary on the loan report.

She did not see the loan report, or valuation, until many years later.
Even the worst of second hand car salesmen would not behave like that.

She got the loan she wanted.

As asked before, if a patient of the nurse "wanted" certain medication, and the nurse fraudulently altered documentation and gave her patient medication unsuitable to their needs, which changes the patients life forever, would not the nurse have questions to answer?

The bank has no responsibility to look after the borrower's interests.

Then why does it claim, according to their own publicity, to look for "proof that you have the earnings and self-discipline to repay your mortgage not just for the first year but long into the future." As said before they advertise and claim to check the borrower (quote) "will be comfortably able to afford your mortgage repayments with enough money left over to live your life in comfort."

 

[Sarenco]

I really don't understand why you insist on these ridiculous analogies.

Your friend applied for a loan. She got the loan. If she can't uphold her end of the bargain, then she will have to face the consequences.

If the bank wants to pursue a former employee or valuer then that's up to them. Again, it has absolutely nothing to do with your friend.

At this stage, I think we have all spent enough time on this thread.

 

[usernameinuse]

I really don't understand why you insist on these ridiculous analogies.

Not all mine. It was Maz2408 who wrote:

You went to a bank believing the information they were giving you was true, correct and in your best interest because they were the experts in that field.

Out of interest, how would it be if the Nurse in question gave you incorrect information regarding medication or treatment for say your 6 year old Child or your 80 year old Mother and it caused them serious harm. Would the nurse be to blame or would it be your fault for being stupid in acting on her expert advice?

You also wrote:

The bank has no responsibility to look after the borrower's interests.

You still have not answered the question: Then why does it claim, according to their own publicity, to look for "proof that you have the earnings and self-discipline to repay your mortgage not just for the first year but long into the future." As said before they advertise and claim to check the borrower (quote) "will be comfortably able to afford your mortgage repayments with enough money left over to live your life in comfort."

And why did the bank seemingly fraudulently alter the loan report and valuation, upon which the loan agreement was based?

 

[Sarenco]

Sigh.

Again, a lender carries out its own due diligence, however imperfectly, on a borrower's ability to meet her obligations for its own benefit - not for the benefit of the borrower.

A lender owes no duty of care to a borrower.

Bottom line, a bank can be entirely reckless in advancing a loan - it does not provide a borrower with a defence in an enforcement scenario.

Your friend voluntarily took a loan. She owes the bank money. The rest is irrelevant.

 

[RichInSpirit]

Hi UserNameInUse.
I have great sympathy for your friend.
I think the bank has as big a problem as your friend with this loan. I think she should request a meeting with them and have a chat, and see if they can suggest any solutions to your friend.
But I suggest that she brings someone along with her, maybe yourself as both a witness and for moral support.

 

[RichInSpirit]

Also if she hasn't missed any payments yet she probably has an excellent credit rating at the moment.
To negotiate to try and find a solution before the problem actually hits may be a wise approach.

 

[Sarenco]

The smart thing for the borrower to do is to engage a PIP, through the Abhaile scheme, as previously advised by others.

Banging on about an alleged "fraud" is, at best, a complete waste of time.

 

[LDFerguson]

Evidently your friend placed a huge amount of faith and trust in what the banker was telling her. So let me ask you this - if this banker had told her that she should borrow a million and that it would be grand, would she have done it? How about two million?

 

[usernameinuse]

a lender carries out its own due diligence, however imperfectly, on a borrower's ability to meet her obligations for its own benefit

It obviously did not do that in this case. Not only that but it looked at her P60 and payslips and added over 60k to her salary on its loan report, unknown to the borrower. That would be like a nurse or doctor altering a patients file, in order for the nurse or doctor to sell them a very expensive medication, but one which was totally unsuitable for the patients needs and which would alter the patients life forever for the worse.

The smart thing for the borrower to do is to engage a PIP

She had one meeting with a PIP already, and he was astonished when he saw the loan report, copies of her P60, payslips, valuation etc in her file. I understand he said there is doubt about PIA being suitable when the loan was obtained due to suspected fraud and wrongdoing, but he is get further opinion, think things over and arrange a second meeting. If it was investigated properly at least the borrower could be cleared of any suspicion of involvement in the fraudulent loan report and valuation.

Evidently your friend placed a huge amount of faith and trust in what the banker was telling her. So let me ask you this - if this banker had told her that she should borrow a million and that it would be grand, would she have done it? How about two million?

No, she just wanted a 3 bedroom house to live in, in a nice area. She was not greedy. She went to the mortgage experts, who had decades of experience, thinking it was the prudent thing to do. After all, according to their own publicity, they look for (quote) "proof that you have the earnings and self-discipline to repay your mortgage not just for the first year but long into the future." As said before they advertise and claim to check the borrower (quote) "will be comfortably able to afford your mortgage repayments with enough money left over to live your life in comfort."
When you worked in the mortgage sector LDFerguson, did you ever see any mortgages being sold at say 10 or 15 times the borrowers salary, and if so, did the banker who sold them ever expect them to be repaid, or did he know it would end in tears for the borrower? Decades of tears?

Do you think if a patient of the nurse asked about certain medication, and the nurse fraudulently altered documentation and gave or sold her patient medication unsuitable to their needs, which changed the patients life forever for the worse, would not the nurse have questions to answer?

Hi UserNameInUse.
I have great sympathy for your friend.
I think the bank has as big a problem as your friend with this loan. I think she should request a meeting with them and have a chat, and see if they can suggest any solutions to your friend.
But I suggest that she brings someone along with her, maybe yourself as both a witness and for moral support.

Thank you for that. A meeting with the bank is a good suggestion. I'll suggest she brings someone along with her, for moral support and as a witness if nothing else, as she is the type who is easily fobbed off by technical jargon and experts in their field telling her what is best.

 

[LDFerguson]

No, she just wanted a 3 bedroom house to live in, in a nice area. She was not greedy.

She borrowed an amount - was it €550,000? - that she could not afford to borrow. She applied for this amount, she was approved for this amount and she signed up for a loan of this amount. According to you, the only reason that she borrowed €550,000 was because this banker told her it was affordable and had falsified documents to support it internally. So if she borrowed €550,000 which she couldn't afford, then why wouldn't she borrow a million that she couldn't afford if she believed everything the banker told her? (Let's assume that this banker would have been equally willing to falsify documents to support a loan of a million.)

When you worked in the mortgage sector LDFerguson, did you ever see any mortgages being sold at say 10 or 15 times the borrowers salary, and if so, did the banker who sold them ever expect them to be repaid, or did he know it would end in tears for the borrower? Decades of tears?

Part of my job was arranging mortgages and giving advice. So in that capacity, as a broker I replaced the local bank branch staff member. I was the one collecting the payslips and evidence of income and sending them on to the various lenders' head offices for approval. If someone was dealing directly with a bank branch, the bank branch would do the same. I can only speak for myself. I was never interested in getting involved with lies about a client's salary or falsifying documents in order to get them a bigger mortgage. Not the sort of business I run. I'm sure it happened though.

 

[Sarenco]

I understand he said there is doubt about PIA being suitable when the loan was obtained due to suspected fraud and wrongdoing

That is correct but, as already explained to you, that provision deals with circumstances where a debtor has fraudulently obtained a loan (which is criminal offence). Unless you are suggesting that your friend acted fraudulently, that provision is totally irrelevant in this case.

Do you think if a patient of the nurse asked about certain medication, and the nurse fraudulently altered documentation and gave or sold her patient medication unsuitable to their needs, which changed the patients life forever for the worse, would not the nurse have questions to answer?

A nurse owes a duty of care to her patient. A lender owes no duty of care to a borrower. Your analogy is therefore completely meaningless.

 

[usernameinuse]

She borrowed an amount - was it €550,000?

It was less than that, but I'd rather not say the exact amount, it is the borrowers business and I do not want to identify her.

why wouldn't she borrow a million that she couldn't afford

Because oldish 3 bedroom houses in a nice area was what she was quite happy to settle for, buy, and live in. And oldish 3 bedroom houses were not costing a million in rural areas , even in 2007.

Part of my job was arranging mortgages and giving advice.

Great, I hope you gave better advice that the banker who advised the nurse. However you did not answer the question. "Did you ever see any mortgages being sold at say 10 or 15 times the borrowers salary, and if so, did the banker who sold them ever expect them to be repaid, or did he know it would end in tears for the borrower? Decades of tears?"