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Poll - Lying to get a loan
Comments
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The Bank are well aware that this goes on, and I would argue that they indirectly encourage it by the extensive use of intermediaries.
If they really were concerned they would tighten up the rules/no longer sell self-cert products or train their underwriters properly.0 -
The Bank are well aware that this goes on, and I would argue that they indirectly encourage it by the extensive use of intermediaries.
If they really were concerned they would tighten up the rules/no longer sell self-cert products or train their underwriters properly.
In the current climate of house price inflation they dont care as they know they can reclaim the money easily.
The sticking point comes if we dont get > inflation, the banks risk increases hence their terms of business become tighter.
Obtaining a financial product to pay for your property is NOT a right, it is up to the institution to lend you the money (or not). People need to understand that if there is any correction or even at best stagnation, their ability to obtain a mortgage would be impaired.0 -
I bought my first house in the days (1986) when you could only borrow up to 2.5 times your income, and I had to provide all kinds of information and guarantees to get the mortgage - past bank statments, referees, statements from employers etc. etc.
How the mortgage world has changed! But if it hadn't, how on earth would anyone on an average income be able to get a mortgage on todays house prices?
Thankfully the last time I moved house was in 1996, so I have what is a tiny mortgage by comparison with what it would cost me to buy the same house now. But if I were buying it today, I would have to lie to get a big enough mortgage offer.....................
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rosysparkle wrote: »Are you suggesting that it's acceptable to commit fraud or a crime, as long as you see it as victimless?
In this case YES! The rules are supposed to be there to protect the borrower. If he knows what he is doing and is willing to take the chance, including the loss of his deposit if prices fall then WELL DONE YOU! These rules are manipulated( 3 x 5 x 1 20 years etc)so much by the banks Im surprise dthey even bother with them now.
HE WHO DARES WINS.......0 -
In this case YES! The rules are supposed to be there to protect the borrower. If he knows what he is doing and is willing to take the chance, including the loss of his deposit if prices fall then WELL DONE YOU! These rules are manipulated( 3 x 5 x 1 20 years etc)so much by the banks Im surprise dthey even bother with them now.
HE WHO DARES WINS.......
You reckon? The rules are there to protect the bank not the borrower! The banks want you to spend the most you can possibly afford with them but no more.0 -
AndrewSmith wrote: »Wrong. It is fraud. Simple and plain. If caught it carries a sentence of up to 10 years in prison for both the client and the adviser (if they knew).
It is blatantly obtaining money by deception and, as such, should be treated in that way.
Put the boot on the other foot, someone borrows £1000 from you and says 'I will promise to pay it back next month from my wages'. You then later find out that the guy is not working and has no income, cannot pay the debt back to you but sees that he has done you no wrong.
Who has been wronged now?
Not a good comparison. Self cert was created to allow the person to lie. Lets not kid ourselves with all the schit the banks say its for. This is the main reason.
The worst that could happen to the bank is they have to take your deposit 15-25% if you default. They know they are covered and this is why they do it. When prices start to get a bit tighter GUARANTEED "self certs" will be witdrawn or will become very hard to get.0 -
Well, I had to think about this one. On the one hand institutions are quite happy to make extravagant claims to get your business, so what harm if you tell them a few little lies to get them to do business with you. On the other hand it's clearly both legally and morally wrong.
In the end I've voted that it's not acceptable because the person with most to lose is the borrower. If you don't meet (what are nowadays quite relaxed) lending criteria then what prospect do you have of actually being able to service the debt?No reliance should be placed on the above.0 -
You reckon? The rules are there to protect the bank not the borrower! The banks want you to spend the most you can possibly afford with them but no more.
Not so. The rules were introduced to stop people borrowing more than they could afford. Anyway this point is irelevant.
The banks are always covered as I have said above. If they thought they would lose through doing this they simply wouldn't do it. They don't make the profits they do through "care in the comunity"
You take the chance and you take the risk with your cash. As long as you don't complain if you lose.0 -
Not a good comparison. Self cert was created to allow the person to lie. Lets not kid ourselves with all the schit the banks say its for. This is the main reason.
The worst that could happen to the bank is they have to take your deposit 15-25% if you default. They know they are covered and this is why they do it. When prices start to get a bit tighter GUARANTEED "self certs" will be witdrawn or will become very hard to get.
If that is the case then why is it that the banks WILL prosecute if they can prove that fraud has taken place? I know of a client and broker who are both serving the remainder of 10 years in prison for placing a self certify mortgage with multiple lenders with different incomes to see if it could be accepted. It was the lender that prosecuted.
Self Cert only means that accounts or payslips do not have to be shown. They will usually still want to see bank statements, and will check with the inland revenue in some cases to verify your employed/self employed status via your NI number. If they smell a rat they will boot it out. They will want to see proof of trading as well in most cases (but not all).
Also with systems such as HUNTER it is very dangerous to then re-apply with a different lender and 'lie' about one's income. People don't seem to appreciate that the lender's do actually talk to each other (figuratively speaking) thus it is actually quite easy for them to spot when someone is 'playing the system' and submitting with numerous lenders using different income levels. After all, you would have to be a complete imbecile to try it with the same lender repeatedly.
There are some very inexperienced and stupid advisers or brokers out there who are prepared to entertain this sort of practice. Good luck to them, they won't be around for too long.
Self Cert is a good tool if used correctly and appropriately, but if abused it will eventually catch you up and bite you in the @ss.0
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