Tuesday, Sep 25, 2007
We knew it already
BBC: Borrowers told to lie about wages
A BBC investigation has found evidence of serious mis-selling in Britain's sub-prime mortgage market.
Posted by holding out @ 08:50 AM (809 views) Add Comment
14 Comments
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1. Paranoia Blue said...
Yes, I have firsthand experience of this very thing up here in Scotland.
There is going to be some mess when all this unravels!
So much for Gordie’s New Jerusalem – perhaps rather, Gehhena on earth!
2. cornishman said...
Well, shock horror news...
It was only a few months ago we were being told there was no sub-prime lending in the UK and that it was all those 'untrustworthy' Americans who had messed up.
But still people think Gordon Brown is wonderful. I despair at times.
3. dohousescrashinthewoods said...
I echo both those those sentiments.
There is no fraud in the UK - until it is discovered.
4. tyrellcorporation said...
'One borrower whose real income was £25,000 told the BBC he was advised to double that on his mortgage application.'
Where the eff is the FSA in all this? They are totally complicit as are the banks and ultimately the government. New Labour love debt and hate prudence - ironic really.
5. Ihopeitgoeswithabang said...
Fraud is fine by Gordon provided it fuels his ambition.
In the last 10 years he could have legislated to stop this from happening, but obviously turned a blind eye to what was happening ( in bad taste I know but ... )
Anyone can fake a mortgage application - it is a totally stupid situation and should not be allowed to happen. But just think what would happen if banks were forced to lend responsibly.
Overnight half the people applying for a mortgage wouldn't be able to pay / offer these stupid sums. It would be an overnight crash.
At the end of the day it's a criminal offense whichever way you look at it. It's Fraud. Pure and simple.
Gordon Brown tough on crime? Only when it suits him.
6. uncle tom said...
This report is so touchingly naive - 'liar loans' have been commonplace in the UK for years, and everyone involved in the mortgage business has been fully aware of it.
'Self cert' mortgages were superficially intended for those who couldn't prove their income, but everyone knew from day one that they would appeal to those didn't have enough income.
While house prices were rising, the overstretched could extract equity to keep up the repayments - when prices stop rising, there will be very large number of defaulters and reposessions...
7. bingo said...
I'm sure that the FSA will be aghast when they hear of these 'liar loans'... Are their offices on the Moon or Mars?
8. Hurryupandcrashdammit said...
Wasn't there a channel 4 programme about this, like, 2 years ago?!
9. harold said...
The sub-text of this article is to shift the blame from the Banks to the borrowers. I.e., We (the banks) acted in 'good' faith - the naughty borrowers were at fault. To some extent this is true; however, given that there is absolutely NO financial education in this county and plenty of ads encouraging people to borrow, what else did they expect? Of course, the public is not taught about the goings-on of the City, because if they were the system would be exposed for what it is - a scam. The 'sting' of the scam is just now unfolding. Many banks will effectively go to the wall leaving a few big-boys with even greater monopolistic control, and the public in debt to them.
10. Bov said...
The BBC has uncovered a story that everyone has known for the last few years, now it just come out. Everyone who passes a bank or watches television is bombarded by ridiculous adverts on how easy it is to get a loan. On one television advert, you can just pick up a phone and get your loan while you are helping your child find his skateboard . It seems that the present government has only encourage people spending money that they do not have and is only helping and protecting the City ,and we saw this last week with the Bank of England and the Chancellor desperately scrambling on how to deal with the problem with Northern Rock cash flow problems. Labour has to understand that people can see through their spin, and flowerly economic reports that is feed to us through the media , and a good example of this are the cues of savers wanting to withdraw their money after countless reassurances from the Chancellor.
11. Loneranger said...
This is going to get very messy. It was bad enough in the late eighties when so called 'white lies' were encouraged by the brokers of the time, this time it will be worse as there was more liquidity availabe which enabled borrowers to lend more to those that couldn't afford it. This is exactly what happened in the US! No one knows the extent of the number of these loans in this country, it will be played out very soon. 10% possibility of a housing crash?? I would put that at a more realistic figure of 40-50% chance!
12. Becky said...
I have a colleague at work who got one of these and I remember him telling me it was a bit higher rates than a "conventional" mortgage but it was the only way he was going to be able to afford anything decent on his salary. At the time that I was amazed that in this day and age when you have to go to ridiculous lengths to prove your identity, address etc when opening virtually any type of account that he was basically able to think of a salary figure and they would just believe him!!!
13. doomwatch said...
Another great piece in investigation by the BBC. I'm guessing this investigation has been shelved for 5 years until
the execs have sold off their portfoilios, as let's face it, this scam has been common knowledge for years, it's just not funny.
14. shipbuilder said...
Conclusive proof if it were needed that every idiot crowing about the healthy housing market, sound economy and how prices will 'flatten, not crash' is either a liar or a blinkered idiot. Transfer the wave of public panic from NR to the housing market and you've got a housing meltdown.