Should a building society lend money without checking if the borrower can repay it? I know a financial institution would normally check to evaluate the repaying capability of the borrower, but say a loan slips through the net ( a loan with an initial 2 year interest free period and a mortgage amount borrowed slightly exceeding the purchase price of the property ) where the repayments are much more that the persons gross income?
In other words, should a financial institution have lent money to an individual where the income needed to service the repayments was many times the individuals income? Yes, the borrower (who was vulnerable at the time) was foolish to borrow the money, but should the financial institution have lent it, without calculating repayment ability themselves or even asking the borrower for financial projections ? No monthly capital repayments were ever made. Is there a code of conduct for financial institutions? The financial ombudsman does not want to know as it took place over 6 years ago. ( ie during the boom ).
In other words, should a financial institution have lent money to an individual where the income needed to service the repayments was many times the individuals income? Yes, the borrower (who was vulnerable at the time) was foolish to borrow the money, but should the financial institution have lent it, without calculating repayment ability themselves or even asking the borrower for financial projections ? No monthly capital repayments were ever made. Is there a code of conduct for financial institutions? The financial ombudsman does not want to know as it took place over 6 years ago. ( ie during the boom ).
