Sue mortgage lender for unrealistic loan approval?

[Jim2007]

The absence of paperwork is a sign or symptom of negligence

Not necessarily so, if a bank has been complying with the DPA and the paperwork is no longer necessary for the operation of their business, then it should be destroyed as required by law.

in response to honest the Bank is supposed to assess affordability with a SVR +2% stress test and can evidence that....most didn't do it

What is the source for this requirement???

THE negilgence angle is difficult particularly when the Bank plays games over the paperwork...in my case they had audacity to say that the Terms of Business letter which is supposed to set out their relstionship with me is not Personal Data !!!. They also said that their valutional panel is commercially sensitive and can't tell me anything !!! Seriously !!

How does this become personal data within the meaning of the DPA???

 

[Raging Bull]

1) Bank has not said its destroyed they are claiming commercial sensitvity. Bank is also required to hold certain data per consumer protection code
2) Its a regulatory requirement
3) If a documents purpose is to set out a banks working relationship with you how on earth can that not be considered personal data

The point is somewhat moot since I have requested formal discovery

 

[Jim2007]

1) Bank has not said its destroyed they are claiming commercial sensitvity. Bank is also required to hold certain data per consumer protection code
2) Its a regulatory requirement

I am aware of the various documents that the bank is required to provide you with at different stages of the lending process, but I am not aware of any requirements for them to retain these documents after the decision has been made. One would think it might be prudent for them to do so, but...

3) If a documents purpose is to set out a banks working relationship with you how on earth can that not be considered personal data

Go and read the definition of personal data in the relevant legislation, it is much more restricted than people think.

 

[mrbea]

A customer is entitled to ask for a copy of the personal data the business holds on them

Thanks for that. Have seen a file which was got, and it shows that the building society knew the person borrowing the money had not the income to repay the mortgage, but it lent the money anyway. It also shows correspondence between broker and building society, which gives false and misleading information about the borrower. The borrower did not give or sign this false information. The broker also claimed the borrower had loan approval from his own bank, which was not true, and urged the building society that it should try to "win" the business.

Would the borrower have a case of suing the building society, as if it had done its homework properly and not rushed the mortgage through, it would not have lent the money?

 

[Bronte]

The borrower did not give or sign this false information.

So the broker and bank conspired against the borrower to give him money he didn't want or couldn't afford? And the borrower had nothing to do with any of it is basically what you are saying. Did the bank and broker also pick out the property?

 

[Gerry Canning]

RSTA.

You asked can you sue? You can indeed, will you get anywhere?, I doubt it .

Maybe your question should be ;
If I stay in arrears and cannot afford Mortgage can I use the defense of poor lending to help me . I think you can use that as a defense to lessen your liability in that you can show you now know your poor repayment capacity was known by (professionals) from Day 1 .
I assume that when you took the Mortgage you naiively believed you could afford it.

Remember ,it was you who proceeeded.The McConnon case was on commercial loans so I would think since it was a business loan it would be looked at from a business view.

To be given 7 times annual salary was always suspect!!

 

[mrbea]

So the broker and bank conspired against the borrower to give him money he didn't want or couldn't afford?

The building society lent the borrower ( whom it never met ) money the borrower had no means of repaying, because the broker supplied false information to the building society. The building society was negligent in checking if it was true or not. The broker in question had a relatively short trading history with the building society, both before the loan and since the loan. ( which happened during the so called boom of course ). Its a case of the broker defrauding the building society and the building society not checking any of the information they were fed.

Did the bank and broker also pick out the property?

I would say the only property the person in the building society and the person in the mortgage brokers picked out were their own properties they bought with their own bonuses and salaries they got in those heady years.

 

[Gerry Canning]

Mr bea;

Looks bad for Lender and Broker , I agree.

Customer still signed for it though , he still has the major responsiblity.
It may well be he can defend himself as already posted , but it will be a hard one methinks.

 

[mrbea]

Mr bea;

Looks bad for Lender and Broker , I agree.

Customer still signed for it though , he still has the major responsiblity.
It may well be he can defend himself as already posted , but it will be a hard one methinks.

I agree with you ( buyer beware and all that ), and thanks for your thoughts on the matter. However the customer did not sign for the ridiculous lies the broker wrote to the building society, and the loan should not have been approved, so its going to be an interesting one.

 

[Bronte]

The building society lent the borrower money the borrower had no means of repaying,

Why did the borrower borrow money he couldn't repay?

That's a strong word 'negligence' you are using in relation to the building society. What checking should they have done? Is the broker still in existence?

 

[mrbea]

What checking should they have done?

The building society should have checked if the borrower had a job. They should have checked his income. They should have checked to see if his assets were as the broker said they were. They should have phoned or contacted the borrowers own bank to see if they had approved him for the loan the broker said they did....or at least to get a heads up on the borrower. The brokers own bank (or any other bank ) never even offered a twentieth of the money the building society did, at any stage in the borrowers lifetime. The building society should have met the borrower, or a second person from the brokers should have met the borrower. Someone should have asked him how was the money going to be repaid. In the file from the building society its clear that they calculated the borrwer had not the ability to repay, or indeed a plan to repay, but still it slipped through the net.

There is no law against anyone walking in of the street in to a broker or a building society and asking for a loan. There is no law against anyone walking in of the street in to a broker or a building society and asking for sponsorship or a handout. Before lending money though, should not a bank always look for ability to meet repayments, or some plan to repay the mortgage? They do now anyway.

What I would love to know though is why the individual in the brokers recommended in writing to the building society they "win" the business, and why the broker supplied false information. Were some brokers or bankers under pressure to achieve a certain level to meet a target, in order to get a bonus? For example, sell 19 mortgages a month; get no bonus....but hit a target of 20 a month get a large bonus? And this was the 20th mortgage at the end of the month and it was rushed through?

 

[Time]

Back in the day a fake P60 with whatever you wanted on it could be bought for a few hundred. A full set of fake accounts for around 1000. Presented with such documents how is a bank meant to check anything?

 

[wbbs]

Banks usually took a salary certificate completed by the employer, 2 recent pay slips and a P60. This was the checking, 3 items to be cross referenced to ensure they were accurate, were all of these documents provided and were all falsified?

As for ringing another bank asking if someone had or had not approval I doubt a bank would give out that info to a competitor not to mention the confidentiality aspect.

I see nothing sinister in the term 'win' relating to getting the business, all banks were trying to poach customers from each other and someone would win the business. Equally most brokers worked on commission from the lenders, not aware of extra bonuses they could earn based on numbers, usually the amount they earned was a percentage of the loans approved.

Did the customer not sign a completed application form with the income details on it? How did they not know what income was being completed for them?

 

[mrbea]

Back in the day a fake P60 with whatever you wanted on it could be bought for a few hundred. A full set of fake accounts for around 1000. Presented with such documents how is a bank meant to check anything?

That is the point: no false P60's were supplied, and no false accounts were supplied, yet the building society still lent the money. The big thick file received from the building society confirms that.

The bank ( or building society ) could and in my opinion, should have done a few checks - just a phone call or two taking 5 minutes would have sufficed - and if it had, it would not have lent the money.

"Back in the day", I wonder what sort of bonuses brokers and / or bankers got for hitting certain targets each month? I wonder if this loan was the one needed to reach a target for the month or quarter?

Banks usually took a salary certificate completed by the employer, 2 recent pay slips and a P60. This was the checking, 3 items to be cross referenced to ensure they were accurate, were all of these documents provided and were all falsified?

Not all the documents above were requested or provided. None was falsified. The salary quoted in a letter from the broker to the building society was different to documented proof above.

Did the customer not sign a completed application form with the income details on it?

The income box was left empty. Must have been a Friday afternoon rush job! Maybe even bank holiday weekend.

How did they not know what income was being completed for them?

They did not until they saw the file from the building society recently, which is years after the application.

 

[44brendan]

There are definitely a large number of similar cases where proper due dilegence was not conducted by banks in approving mortgages based on documentation/information supplied by intermediaries. However, despite there being a number of reposession cases where this was brought up in Court, I have yet to see a judge refuse to grant an order on that basis. The bottom line is that the loan applicant applies to the Bank for a loan. The Bank grants the loan and the applicant(s) takes the money. There is no legal onus on the Bank to properly asses the risk that they are taking. Obviously this is standard practise, but it is not a legal obligation. As a result of poor analysis the Banks did lend to many clients who were not capable of meeting the repayments. However, from a legal perspective the Courts expect those who borrow money to repay it, unless they are minors or not of sound mind in entering the contract.

 

[mrbea]

As for ringing another bank asking if someone had or had not approval I doubt a bank would give out that info to a competitor not to mention the confidentiality aspect.

You are probably right there. However, sometimes a bank is given as a reference, for example if leasing a premises. A third party may ask the bank if such and such is "good" to meet a certain commitment.
If the borrowers own bank would not lend him €40,000 against a property why would the building society lend him €400,000? Do the banks never seek references from each other?

The bottom line is that the loan applicant applies to the Bank for a loan.

If that happened in this case the borrower would not have got the loan. What happened was the borrower applied to the broker, and the broker sent on incorrect information. Surely the broker and building society should meet some standards?

 

[44brendan]

Sorry, but the fact that he used a broker to process the application does not change the legality of the transaction. I agree that there are certain morality issues here but unfortunately that does not change the fact that the debt transaction was and is a legal obligation freely entered into.

 

[Sunny]

Incompetence is not illegal. Both parties voluntarily entered into a contract. No judge will ever ever find against the bank in cases like this. The borrower knew he would struggle to pay it back but still signed. The bank should have known the borrower would struggle to pay it back but still signed. Both parties are to blame but it doesn't make the contract invalid.

People should spend their time trying to deal with the problem rather than dreaming up some mad legal loophole that will allow them to walk away over night. It's not going to happen.

 

[Mrs Vimes]

Would the borrower have a case of suing the building society, as if it had done its homework properly and not rushed the mortgage through, it would not have lent the money?

From the sound of things, the bank may have a case for fraud against the broker but I can't imagine that would help the borrower any.

 

[Bronte]

The income box was left empty. Must have been a Friday afternoon rush job! Maybe even bank holiday weekend.

.

So the borrower signed a form without checking it's accuracy? Or he signed it knowing full well the broker was going to fill it out to suit the borrowers mortgage demand, on the property the borrower had looked at, wanted, bid on, paid booking deposit on, hired surveyor for, hired solicitor for, found broker for. The property the borrower decided how much he wanted in mortgage for, and yet he apparently could not afford it. Yes very much the broker and the banks fault the borrower is now in a mess.