Should bank be reported for increasing salary on mortgage application?

[RedOnion]

Perhaps the bank was afraid to open a can of worms, and possibly unearth other similar cases?

You haven't said which bank it was, but I'm aware of a number of investigations into areas like this, a few leading to prosecutions. But it's a long time since I saw one. The banks are the victim here, so I can't see any reason they'd want to brush it under the carpet?

It's unusual that this is all coming to light years after the property was repossessed. It should have been investigated / challenged at that time. In fact, it's at that stage a number of 'irregularaties' came to light and led to banks investigating specific brokers (and staff in one case I'm aware of).

 

[Leo]

The late borrower did write to the bank who said they did not consider it fraud, ...
It was the borrowers wish before she passed away that it should be investigated properly, so it would not happen again, and any white collar crime should be investigated and punished. Perhaps the bank was afraid to open a can of worms, and possibly unearth other similar cases?

So the bank, who were the only possible victim of this claimed fraud said that they're happy it wasn't fraud. I'm afraid it's time to drop it and move on.

 

[Timjoe]

If there was fraud here, it's between the broker and the bank, so one of those parties would need to make a formal complaint.

The fraud or mistake, call it what you will, affected the borrower, because if the bank acted properly her life would have been completely different. The broker was appointed by the bank to sell its products. If someone in the bank invented the annual income figure over 160k, why would the broker make a formal complaint, as you suggest?

The banks are the victim here, so I can't see any reason they'd want to brush it under the carpet?

Not sure if banks are really the biggest victim if they got their money in the end. Certainly they made a mistake, who know what action they took against the bank employee involved, who approved the loan? The banks image is bad enough without admitting to the public what went on in a small minority of case, how bad bank checks were etc.

Again what was the mortgage for?

A piece of land, of all things. As I said earlier,she should not have borrowed the money, but that is beside the point. I am not looking for judgement on the borrower.

If there was nothing filled in income wise then surely there was a covering letter or something to explain income

The bank were good enough to return the covering letter in the file, when the file was requested years later, which said her annual income was 40k. No surprise the bank long since has stopped selling its products through this broker.

It appears to me the bank needs to be investigated, for peace of mind if nothing else. Could a close relative of the deceased borrower submit the file to the Gardai Fraud dept I wonder? No harm asking them I suppose.

 

[Brendan Burgess]

She borrowed the money.

Did she not realise that she was borrowing money?

Did she not know that she would have to repay it?

The lender should look into the accusation that one of their staff committed a fraud on the bank.

But there was no fraud on your friend.

She knew what she was doing.

Brendan

 

[Bronte]

error

 

[Gordon Gekko]

The bank has not said how much commission the broker got, or if the person in the bank who approved the mortgage got a bonus or commission for reaching a target or whatever. Any proper investigation should uncover who was at fault.



I have seen the 3 years of annual accounts, they are very simple. There was no ltd company, no pension, no deferred retirement relief claims, no bonuses, no shares, no share options, no complications. The self employed persons income per year was 40k and her accounts and accountant confirmed that. The bank has failed to explain why they used an annual figure of over 160k. It could hardly have been a mistake when they had clear copies of the accounts and a letter stating the borrowers annual income was 40k. Luckily it is all in the file.

What about other income?

 

[Bronte]

In 2007 a mortgage applicant went to a broker with proof of income, of €40,000 per year.
The mortgage was for an expensive piece of land.
She was shocked to discover the bank lied about her income. It went from 40k a year to over 160k a year,

I think posters on here are getting this entirely wrong
- Dead borrower
- Tim is not related
- It's 14 years later, presumably statute barred
- what can be hoped to be achieved now, we all know it was the Wilde Whest back then

The questions to ask are:
- Why does Tim not want us to comment on the borrower
- Why was a person on 40K applying for a loan that only someone on 160K could hope to buy
- Did the bank lose money on this, bet they did, 2007, for sure.
- How did someone on 40K who could not afford to repay something based on an 160K income pay even the first month's repayments
- How much was borrowed, not a word on that
- Nor what exactly was purchased for what reason
- What difference does any of this have to Tim, what does he hope to achieve

 

[Pugmister]

I know of someone who paid a employee of a bank €2500 in order to get mortgage approval in recent years. Apparently said individual operated this operation as a side line business and his number was passed around tradesmen who often found it difficult to get mortgage approval. Apparently the bank has 1000's of mortgages on their books based on falsified earnings that they are unaware of. The bank employee has since left the country but he did warn the party that i know if they ever missed a payment then the activity would be discovered.

 

[Monbretia]

But 'a piece of land' is not a sufficient answer, to make any sense of the loan application one would need to understand more of the borrowers reasoning in applying for this mortgage as she is not here to tell us! We are only hearing some of the story second hand so the bank side makes no sense but then we don't know the whole story.

In fairness your friend hardly was dragged in off the street and made apply for the mortgage, for some reason she wanted it I presume and instigated the procedure, if she didn't then there is again more to the story.

 

[Timjoe]

What about other income?

As said before, no other income, no investments, no shares, no complications. As said before, her total income was €40,000 per year. In that ball park, give or take a few euro. The audited accounts had and has the specific figures.

 

[Bronte]

I've heard this said before and don't doubt it, but how were they able to get away with it? Did the banks just take the broker's word on what the mortgage applicant's salary was, without looking for proof via a salary cert etc from their employer?

This is how
- fake P60's, easily done
- no checking of income
- relying on any figure popped out of thin air
- allowing imaginary income as income, rental income and what not

And yes I know of in my own family and friends of the above. The banks couldn't dish it out fast enough, including to me.

 

[Gordon Gekko]

As said before, no other income, no investments, no shares, no complications. As said before, her total income was €40,000 per year. In that ball park, give or take a few euro. The audited accounts had and has the specific figures.

Just playing devil’s advocate, how do you know on the basis that the person is deceased? I’d leave it be. It’s 14 years ago and the person is no longer with us.

 

[Monbretia]

Definitely broker loans were easily slipped through, lots of fake p60s/payslips/salary forms etc back in the day. There was a time when there was not follow up on them, I spent a day in lending dept of big bank and some of the senior underwriters told me that even though they had drawn attention to applications that looked dodgy to them they were just told if you don't like it you know where the door is! But at least in those cases there was some sort of logic to the applications in that the paperwork and reason for lending was there, it just wasn't accurate.

Still though this story makes little sense as in most mortgages are for property of some kind, site/house/commercial and not just a random piece of land without a further plan.

 

[Timjoe]

I think posters on here are getting this entirely wrong
- Tim is not related

I am actually. Not that it matters much.

- what can be hoped to be achieved now, we all know it was the Wilde Whest back then

It was the wishes of the deceased so it would not happen again / happen to others. And surely all possible white collar fraud should be investigated, you would agree with that? And even if it was the Wilde Whest back then, should not all those who altered figures so dramatically with life changing consequences be investigated? Your attitude is a bit like saying "if sex abuse happened back then, shure what can be hoped to be achieved now, we know it was endemic back then"

The questions to ask are:
- Why does Tim not want us to comment on the borrower

She is deceased, you can comment if you want but it is not relevant to the question of submitting the file to the Garda Fraud dept. She knew she should not have borrowed the money.

- Why was a person on 40K applying for a loan that only someone on 160K could hope to buy

In 2007 people got carried away.

- Did the bank lose money on this, bet they did, 2007, for sure.

Land did not fall as much as some housing. The land was repossessed, the borrower lost whatever savings she put in to the mortgage and insurance covered the rest, as far as I know. So the bank did not lose money.

- How did someone on 40K who could not afford to repay something based on an 160K income pay even the first month's repayments

Savings and a 30k inheritance.

- How much was borrowed, not a word on that

I do not want to identify the borrower and do not see it of relevance.

- Nor what exactly was purchased for what reason

I guess she thought it was going up in value and a good place for her 30k inheritance etc. Maybe she hoped to sell it after a year. The bank neglected to ask her how she proposed to pay back the loan.

- What difference does any of this have to Tim, what does he hope to achieve

For peace of mind, to carry out the wishes of the deceased borrower who handed the file to me, to help ensure it does not happen again, and because it greatly negatively affected the borrowers life.

 

[Leo]

The fraud or mistake, call it what you will, affected the borrower, because if the bank acted properly her life would have been completely different. The broker was appointed by the bank to sell its products.

It's common in these circumstances that borrowers seek to blame others for their own poor decisions. But banks carry out income and affordability assessments to protect their interests, not the borrowers. Borrowers are advised to take independent advice. Unless the broker approached the borrower, put a gun to their head and forced them to take out a loan they didn't want and couldn't afford, you have no case here.

Otherwise, what we have is a borrower approaching a broker asking them to arrange a loan for them, and the broker then allegedly deceiving the bank in order get the borrower the loan they asked for. It is highly unlikely you have a full picture of all that transpired here, so you may be relying on the one-sided evidence that the borrower has chosen to share. Their view on the transaction was likely coloured by the subsequent repossession.

If someone in the bank invented the annual income figure over 160k, why would the broker make a formal complaint, as you suggest?

I clearly didn't suggest that. If someone in the bank invested the figure, then it is the bank who could take action against that person. They have already said they see no issue with this case, and as such you are honestly wasting any energy taking this further.

 

[Leo]

And surely all possible white collar fraud should be investigated, you would agree with that?

Your fundamental issue is you have no evidence that any fraud was perpetrated here.

 

[EmmDee]

Should the matter be reported to the Gardai Fraud department,

According to your account, the only possible victim of a fraud was the bank. They have already said they don't want to persue a fraud claim so I don't know why you want to report a fraud on a thid party who have said they don't consider it fraud.

If you feel your relative was missold something, that isn't fraud. But you'd have to show that they didn't know they were getting a mortgage they couldn't afford. And, even though you haven't provided details, let's say they were applying for a €500k mortgage on a €40k income, it would be a stretch to claim they didn't know that was unusual - irrespective of what numbers were filled in what boxes. The very fact that they applied for a mortgage way beyond what could be normally expected would imply they weren't missold.

So if there is any fraud to be reported, it would be that your relative made a fradulant mortgage application. If a bank employee or a broker was complicit, it is still up to the bank to decide whether they chase it up. You don't have a role in it

 

[Timjoe]

Your fundamental issue is you have no evidence that any fraud was perpetrated here.

Wrong. It is in the file. Her accounts, plain as day. And the banks annual income figure for her, plain as day. The bank would not explain the massive difference. Why was that do you think?

Quote from original post : "In 2007 a mortgage applicant went to a broker with proof of income, of €40,000 per year. The mortgage was for an expensive piece of land. She gave the broker three years of audited accounts. Details of her income were left blank on the mortgage application form. However, some years after taking out the mortgage, the borrower obtained the file from the bank, having made a Subject Access Report request under the 1988 and 2003 Data Protection Acts. She was shocked to discover the bank lied about her income. It went from 40k a year to over 160k a year, despite her accounts, which she had provided to the bank, showing it was 40k a year. On internal notes the bank said because of the borrowers annual income of over €160,000 she could afford the mortgage."

According to your account, the only possible victim of a fraud was the bank.

The bank got their money in the end. It was the borrowers life which was hugely negatively affected. Her main wish though was that it should not happen to others. She did not want to see other lives destroyed or history repeat itself. And justice should be done in any possible white collar fraud cases, would you not agree? And if someone got a commission or bonus as a result of white collar fraud, they should be punished, no?

it would be that your relative made a fradulant mortgage application.

You can say what you want about her, but she did not say or do anything fraudulant. The file shows that. She provided the broker with three years accounts as requested and even furnished a letter saying her income was 40k a year, and asked the broker could she borrow the money. She never denied that. As said earlier, she was shocked years later to discover the bank lied about her income. She always behaved truthfully but was no expert in financial matters. If she was, she would probably not have earned only 40k a year and passed away without any assets.

 

[Leo]

Wrong. It is in the file. Her accounts, plain as day. And the banks annual income figure for her, plain as day. The bank would not explain the massive difference. Why was that do you think?

I'm afraid nothing you have posted here comes close to suggesting sufficient evidence of fraud exists.

It was the borrowers life which was hugely negatively affected. Her main wish though was that it should not happen to others.

You need to separate out a suggestion of fraud relating commission and the borrower's personal responsibility for taking out a loan they requested. Tens of thousands of people took out loans they ultimately could not afford, that is not fraud.

 

[_OkGo_]

How much was borrowed, not a word on that

I do not want to identify the borrower and do not see it of relevance.

It is probably the only thing of relevance and will in no way identify the person. It doesn't have to be exact but even a ballpark figure would help to understand if this was normal for the time or potentially fraudulent.

It doesn't sound fraudulent. The income could have been inflated by 'projections' of increased income from the investment. For example if that was farming land purchased for €1m then they could reasonably have expected an significant increase in income. The rules were not as strict back then so it may be very hard to prove anything fraudulent. The bank probably wrote it off as a bad loan.