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  • FIRST POST
    • Freecall
    • By Freecall 12th Oct 16, 1:16 PM
    • 986Posts
    • 856Thanks
    Freecall
    Lying for lending
    • #1
    • 12th Oct 16, 1:16 PM
    Lying for lending 12th Oct 16 at 1:16 PM
    Many news sources are covering the uSwitch survey of 1,000 mortgage applicants with children under 12.

    The Independent interviewed one who accepted that she had lied in order to secure a mortgage of the size they wanted. She offered the following comment in support of her actions :

    'We could actually afford the mortgage but only just.'

    With a sub 2% rate on offer that 'but only just' bit has to be a serious worry not only for those that obtain these mortgages but the economy as a whole - if the practice is as widespread as the survey would suggest.
Page 1
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 1:22 PM
    • 51,295 Posts
    • 43,110 Thanks
    Thrugelmir
    • #2
    • 12th Oct 16, 1:22 PM
    • #2
    • 12th Oct 16, 1:22 PM
    Lenders checks are very thorough. People have always lied. That's the nature of the human race. All very well until things go wrong. Then they go really wrong. As impacts future credibility as well.

    As I often quote. This organisation exists for the very reason that no lender wants a bad apple. So while competition is fierce. Data is freely shared.

    http://www.nhunter.co.uk/
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • kingstreet
    • By kingstreet 12th Oct 16, 1:36 PM
    • 30,025 Posts
    • 15,963 Thanks
    kingstreet
    • #3
    • 12th Oct 16, 1:36 PM
    • #3
    • 12th Oct 16, 1:36 PM
    If we get payslips or bank statements which show any outgoing the lender will take into account in setting affordability (childcare/student loan/season ticket loan etc) and we weren't aware of it before, we won't submit any application until we've investigated what it is and how it impacts affordability.

    We would not submit an application if we believed there was any attempt to deceive.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • muhandis
    • By muhandis 12th Oct 16, 1:48 PM
    • 231 Posts
    • 86 Thanks
    muhandis
    • #4
    • 12th Oct 16, 1:48 PM
    • #4
    • 12th Oct 16, 1:48 PM
    Yeah, from what I'm heard from friends and colleagues, withholding pertinent information is quite common among mortgage and remortgage applicants, the common ones being -

    1. Getting a mortgage/remo while pregnant or with a new born child but not declaring this on the application.

    2. Getting a mortgage/remo just before going on parental leave, career break, sabbatical and not declaring this.

    3. Not declaring elderly dependants living at home.

    4. Lowballing commuting costs or not showing any.

    5. Borrowing from family for funding the deposit

    I'm sure there are many more things that people could lie about or withhold information on to improve their chances of getting the mortgage they need. And I think it's gone up a lot in the last couple of years after the new tighter regs came in. It's also likely much more prevalent in places with high price-income multiples like London, Bristol and other parts of the SE. It's hard for the lenders to do much though, how would you police all this in a cost effective way.

    With all the detailed affordability calculators out on the internet, it's quite easy for a potential borrower to see exactly what impacts affordability in the lender's eyes.

    Many news sources are covering the uSwitch survey of 1,000 mortgage applicants with children under 12.

    The Independent interviewed one who accepted that she had lied in order to secure a mortgage of the size they wanted. She offered the following comment in support of her actions :

    'We could actually afford the mortgage but only just.'

    With a sub 2% rate on offer that 'but only just' bit has to be a serious worry not only for those that obtain these mortgages but the economy as a whole - if the practice is as widespread as the survey would suggest.
    Originally posted by Freecall
    Last edited by muhandis; 12-10-2016 at 1:50 PM.
    • spadoosh
    • By spadoosh 12th Oct 16, 1:53 PM
    • 3,762 Posts
    • 4,817 Thanks
    spadoosh
    • #5
    • 12th Oct 16, 1:53 PM
    • #5
    • 12th Oct 16, 1:53 PM
    Do mortgage lenders not ask to see bank statements? Mine certainly did.

    Unless you live your life in cash theres always a trail. It really cant be that hard to find a discrepancy.

    Is it not a case of the banks being aware of it and willing to take the slight increased risks in that they should be protected with a secured mortgage. If the borrower falls foul, on their head be it?
    Don't be angry!
    • Pixie5740
    • By Pixie5740 12th Oct 16, 1:55 PM
    • 8,872 Posts
    • 11,888 Thanks
    Pixie5740
    • #6
    • 12th Oct 16, 1:55 PM
    • #6
    • 12th Oct 16, 1:55 PM
    No doubt if it all blows up in her face and she can no longer keep up the mortgage repayments it will be the lender's fault.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • regprentice
    • By regprentice 12th Oct 16, 2:08 PM
    • 635 Posts
    • 453 Thanks
    regprentice
    • #7
    • 12th Oct 16, 2:08 PM
    • #7
    • 12th Oct 16, 2:08 PM
    Childcare is extraordinarily expensive nowadays - my wife quit her job when our second was born, as at cost of £50 a day per child she would have needed a salary of £32k a year just to break even after Tax and NI. There really doesn't seem to be awareness in younger people of how much this costs. In many cases, its basically knocking a single salary out of the affordability equation.


    Bearing in mind that the survey referenced in the article looks at the last decade as a whole i'm sure many will find it harder to remortgage now that the new affordability rules have come in and I suspect that will become a bigger story over time.
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 2:20 PM
    • 51,295 Posts
    • 43,110 Thanks
    Thrugelmir
    • #8
    • 12th Oct 16, 2:20 PM
    • #8
    • 12th Oct 16, 2:20 PM
    No doubt if it all blows up in her face and she can no longer keep up the mortgage repayments it will be the lender's fault.
    Originally posted by Pixie5740
    Won't change anything though. Self inflicted. So will have to live with the consequences for a very long time.

    No different to avoiding the taxman. One day. Matters come to light.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • stator
    • By stator 12th Oct 16, 2:22 PM
    • 5,057 Posts
    • 3,214 Thanks
    stator
    • #9
    • 12th Oct 16, 2:22 PM
    • #9
    • 12th Oct 16, 2:22 PM
    It's a bit silly to include childcare costs in affordability checks because if things get bad you can always sell them to work down pit.
    Changing the world, one sarcastic comment at a time.
    • kingstreet
    • By kingstreet 12th Oct 16, 2:39 PM
    • 30,025 Posts
    • 15,963 Thanks
    kingstreet
    Do mortgage lenders not ask to see bank statements? Mine certainly did.

    Unless you live your life in cash theres always a trail. It really cant be that hard to find a discrepancy.

    Is it not a case of the banks being aware of it and willing to take the slight increased risks in that they should be protected with a secured mortgage. If the borrower falls foul, on their head be it?
    Originally posted by spadoosh
    As a broker, even if the lender doesn't request bank statements itself, we are expected to check the outgoings to ensure we don't contribute to a fraudulent application - deliberately, or by accident.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Thrugelmir
    • By Thrugelmir 12th Oct 16, 2:40 PM
    • 51,295 Posts
    • 43,110 Thanks
    Thrugelmir
    It's a bit silly to include childcare costs in affordability checks because if things get bad you can always sell them to work down pit.
    Originally posted by stator
    No pits left around here. So it's chimneys instead.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • spadoosh
    • By spadoosh 12th Oct 16, 2:51 PM
    • 3,762 Posts
    • 4,817 Thanks
    spadoosh
    As a broker, even if the lender doesn't request bank statements itself, we are expected to check the outgoings to ensure we don't contribute to a fraudulent application - deliberately, or by accident.
    Originally posted by kingstreet
    So it sounds like a case of i know im lying and happy to take the risk, they (the bank) know im lying and are happy to take the risk lets keep the whole thing shush....? (everyone wins... for now. Liar gets a house, lied to probably makes some decent money that they should have to refuse)
    Don't be angry!
    • kingstreet
    • By kingstreet 12th Oct 16, 2:55 PM
    • 30,025 Posts
    • 15,963 Thanks
    kingstreet
    As I said, lenders have brokers policing applications for them since MMR. We are not permitted to submit an application unless 100% sure it meets lender criteria and affordability.

    We can be called to account and face sanction if found lacking.

    The lenders who don't ask brokers for bank statements may do so for direct applicants, so reliance is being placed on us as gatekeeper for introduced business.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • muhandis
    • By muhandis 12th Oct 16, 3:14 PM
    • 231 Posts
    • 86 Thanks
    muhandis
    Please note that I am in no way casting any aspersions on yourself or mortgage brokers in general. I'm in fact a huge admirer of the way in which you respond to queries on this board.

    But out of interest, how does this still go on then? In practice, is it cost effective for brokers or lenders to comb through the bank/credit card statements line by line to tally the nature and amount of outgoings with what has been said in the application by the borrower?

    Or if a visibly pregnant applicant says that she doesn't expect there to be any changes in her circumstances, would a broker bring it up?

    Kala

    As I said, lenders have brokers policing applications for them since MMR. We are not permitted to submit an application unless 100% sure it meets lender criteria and affordability.

    We can be called to account and face sanction if found lacking.

    The lenders who don't ask brokers for bank statements may do so for direct applicants, so reliance is being placed on us as gatekeeper for introduced business.
    Originally posted by kingstreet
    • kingstreet
    • By kingstreet 12th Oct 16, 3:30 PM
    • 30,025 Posts
    • 15,963 Thanks
    kingstreet
    is it cost effective for brokers or lenders to comb through the bank/credit card statements line by line to tally the nature and amount of outgoings with what has been said in the application by the borrower?
    Originally posted by muhandis
    It doesn't matter if it's cost effective, it's what we're expected to do so you find a way to earn which takes account of your responsibilities.

    Some lenders also do this, others don't but they may delegate to the introducing broker.

    I'm sure if there is no face to face activity, it is possible for someone pregnant to circumvent the issue. However, as noted in the article if they say they will return to work full time on same pay and a relative will provide free childcare, there's not a lot we or a lender can do to verify it.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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