Lending criteria

Mikey5454 · 12 October 2017 at 6:56PM

Just a long shot, but looking for info on the Lending Criteria for Bank of Scotland Mortgages in Year 2009. Perhaps an ex employee could advise or an expert in historical financial data.
B of S advise they had no specific lending criteria for Mortgages in 2009. The reason I ask is a complaint lodged for mis-Selling a mortgage interest only in 2009 to a 77years old widow with end term at 87 yrs, with only income as old age gov pension and no other assets. No plan in place for repayment.
B of S advised new lending criteria was created in June 2010 !! after takeover by Lloyd’s.
My belief is this is incorrect and B of S had maximum age as 70 years for Mortgages at end of term. Any help much appreciated.
Any help much

Thrugelmir · 12 October 2017 at 10:49PM

Mikey5454 wrote: »

My belief is this is incorrect and B of S had maximum age as 70 years for Mortgages at end of term.

If they had such an internal policy then it would never have passed the underwriting stage. As much as lenders were lax in their lending. There were still controls.

Mikey5454 · 13 October 2017 at 5:28AM

Didn’t really answer my question.
Whatever the Controls were, this is the Policy I require.
There was a cosy arrangement between a Broker and the Business Development Manager at the time, and irrespective of the Underwriting stage I believe this was a Trade Mates Job, in other words pushed through without normal control mechanism checks.
The reason I say this is the Broker initially stated on his initial contact with B of S, that the maximum age for the end of term was 70 years, never mind accepting an Application at 77yrs with end term at 87 yrs.
The Product was unreasonable and therefore falls into the category of mis-sold.

csgohan4 · 13 October 2017 at 6:14AM

it is not always mis sold if the client didn't read the T+C correctly. If they didn't have a repayment vehicle in place but said they did or lied about their income, that would also be construed as mortgage fraud. However most will say sell the house and down size.

Mikey5454 · 13 October 2017 at 7:34AM

You are missing the point.
The lending criteria at the time was advised as 70yrs at end of term.
The Morgage was given at 77yrs with end of term at 87yrs.
Therefore require official Policy Lending Criteria for B of S at 2009 - simple.

David_White · 13 October 2017 at 8:09AM

I presume you've written to BoS formally requesting this information?

Mikey5454 · 13 October 2017 at 8:34AM

Yes, an official complaint has been lodged, but only oral advice re lending criteria in 2009, B of S reluctant or unable to provide categoric proof of lending criteria at 2009,which seems odd. The claim is still being pursued and active.
Really just trying to do my own detective work, as I do not believe there was no laid down lending criteria at the time for his type of product. If there was it would certainly not agree a Product Sale on the information I have given. It was totally irresponsible and not suitable for purpose.
As initially requested really need b of s employee current or previous to confirm criteria.

kingstreet · 13 October 2017 at 8:36AM

Didn't BoS have a similar product to Halifax Retirement Home Plan which could be interest-only with a term of 40 years?

TrickyDicky101 · 13 October 2017 at 9:47AM

What's your problem with it (apart from it being 'totally unsuitable' in your opinion)?

Or to ask another question, what outcome do you wish to achieve from a complaint?

Was this a remortgage (so merely replacing one debt with another) or was it an equity release-type transaction (so the aged borrower got cash and has presumably spent it)?

TrickyDicky101 · 13 October 2017 at 11:12AM

It's a relevant question (ie what outcome are you seeking) because irrespective
of whatever the criteria was it won't change the fact that the bank has lent out money to a borrower and presumably expects to be repaid at the maturity of the term.

The approach used by the FOS when calculating compensation is to put the consumer back in the position they would have been in if the mis-sale had never happened. So that limits options for financial redress as it requires the alternatives (of what would have happened if the mortgage had not been taken) to be considered and evaluated. This could easily mean that the consumer is no worse off as a result of a mis-sale and thus no financial compensation due (other than maybe an amount for hurt feelings or distress).

If you are pursuing this for other reasons (eg to identify weakness and ultimately improve BoS/Lloyds internal procedures or to improve employee training), then it is worth noting that the mortgage landscape and associated regulation has massively changed since 2009 and any such improvements have probably already been enacted.

So outcome is a key consideration in deciding how much effort you wish to expend on discovering the aforementioned criteria.

Welcome to the forum by the way.

ACG · 13 October 2017 at 12:12PM

This is not much help, but it is not uncommon for lenders to lend outside their normal criteria in certain circumstances.

I can think of a case last month where the client failed criteria in 3 points with a building society, but we got it through with them as an exception. The alternative would have cost the client £120 a month more plus an extra £1000 in fees. So it is a practice still carried out today.

That being said, I can kind of see your argument. But then there is always more to the story - ie, why did the person sign up to a 10 year Mortgage knowing they had no way of paying it off. What would have happened had the Mortgage not been granted, what was on the application form - a lot of interest only Mortgage were sold on the basis of sale of current property etc etc.

Regardless of whether it is in criteria or not, you can still complain a Mortgage was miss sold. The criteria will not help or hinder your cause as far as I am aware. It was either miss sold or it was not.

Lending criteria

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