What responsibility have building societies to ensure borrowers are capable of repaying loans? This happened to someone I know in 2004 / 2005, when he was on medication (anti depressives and lithium etc ), out of work and not thinking straight, having got an unsolicited sales call from a mortgage broker.
He got a loan for a buy to let mortgage, in a country town, for 90 times his annual income. How did that slip though the net, or was that usual?
The property in the "buy to let" was valued incorrectly - it was a run-down 100 year old property and, for example, the building society valuer said it had 3 utility rooms etc, which it did / does not. The valuer for the building society valued the 3 terraced run-down, unoccupied cottages on an eleventh of an acre site at approximately one and a half million - thats €17.000,000.00 an acre!
Other valuers before and since have valued it at a lot less, but the borrower did not know that when he took out the loan. He does have the benefit of those written valuations now though, thank God. Shouldn't the valuer for the financial institution have valued the property correctly? Should not the financial institution have checked to see if the borrower had a job or business when taking out the loan, and should not the financial institution have checked to see if the borrower had the means to make repayments?
Should some sort of even basic financial projections not have been sought?
The borrower has never made a monthly capital repayment, has the derelict "buy-to-let" on the market since 2006 without any offers, and it has recently been valued at about 3% of cost. The borrower has had a very frugal lifestyle over the past 8 years and has used the proceeds from the sale of other family property to pay some of the mortgage to date. There is a big shortfall.
He has a few options. He could, and possibly will, go to England and seek bankruptcy there. He has no 3rd level qualifications, getting old and cannot get a decent job. Alternatively, as a business project, he is currently undertaking a viability study in to opening the houses as a tourist attraction.....to show how some people lived over 100 years ago ( 5 ft 6 inch high doorways in the cottages etc ), through to the absurdity of the 2004 / 2005 celtic tiger years when these "buy to lets" were valued by the building soc valuer at €17 million an acre, in this quiet side-street in a country town. He is also writing a book / has it half written on his dealings with the financial institution, the numerous correspondences and their inability to answer questions etc. He finds writing the book quite theraputic and in any case has little else to do now.
Given the uniqueness of the case - €17 million is arguably the highest price paid per acre for land outside of Dublin (does anyone know of any higher? ) - do you think there would be a market for such a book? It is one persons tale of how his life was ruined by a financial institution lending money when it clearly should not have. He has to take some responsibility for his actions as he signed on the dotted line, although he does feel very misled. Surely someone apart from the young lady in the mortgage brokers should have met him / checked his loan? Lots of people have suffered during the downturn but surely 90 times income + €17million / acre for a "buy to let" mortgage valuation is a record? He thinks the tourist attraction / book may generate some income...any thoughts? At the very least it may get him meeting other people who may feel they have been exploited by an unscrupulous lender / valuer, maybe form a support group etc.
He got a loan for a buy to let mortgage, in a country town, for 90 times his annual income. How did that slip though the net, or was that usual?
The property in the "buy to let" was valued incorrectly - it was a run-down 100 year old property and, for example, the building society valuer said it had 3 utility rooms etc, which it did / does not. The valuer for the building society valued the 3 terraced run-down, unoccupied cottages on an eleventh of an acre site at approximately one and a half million - thats €17.000,000.00 an acre!
Other valuers before and since have valued it at a lot less, but the borrower did not know that when he took out the loan. He does have the benefit of those written valuations now though, thank God. Shouldn't the valuer for the financial institution have valued the property correctly? Should not the financial institution have checked to see if the borrower had a job or business when taking out the loan, and should not the financial institution have checked to see if the borrower had the means to make repayments?
Should some sort of even basic financial projections not have been sought?
The borrower has never made a monthly capital repayment, has the derelict "buy-to-let" on the market since 2006 without any offers, and it has recently been valued at about 3% of cost. The borrower has had a very frugal lifestyle over the past 8 years and has used the proceeds from the sale of other family property to pay some of the mortgage to date. There is a big shortfall.
He has a few options. He could, and possibly will, go to England and seek bankruptcy there. He has no 3rd level qualifications, getting old and cannot get a decent job. Alternatively, as a business project, he is currently undertaking a viability study in to opening the houses as a tourist attraction.....to show how some people lived over 100 years ago ( 5 ft 6 inch high doorways in the cottages etc ), through to the absurdity of the 2004 / 2005 celtic tiger years when these "buy to lets" were valued by the building soc valuer at €17 million an acre, in this quiet side-street in a country town. He is also writing a book / has it half written on his dealings with the financial institution, the numerous correspondences and their inability to answer questions etc. He finds writing the book quite theraputic and in any case has little else to do now.
Given the uniqueness of the case - €17 million is arguably the highest price paid per acre for land outside of Dublin (does anyone know of any higher? ) - do you think there would be a market for such a book? It is one persons tale of how his life was ruined by a financial institution lending money when it clearly should not have. He has to take some responsibility for his actions as he signed on the dotted line, although he does feel very misled. Surely someone apart from the young lady in the mortgage brokers should have met him / checked his loan? Lots of people have suffered during the downturn but surely 90 times income + €17million / acre for a "buy to let" mortgage valuation is a record? He thinks the tourist attraction / book may generate some income...any thoughts? At the very least it may get him meeting other people who may feel they have been exploited by an unscrupulous lender / valuer, maybe form a support group etc.