Monday, Oct 20, 2008
Innocent victims?
Guardian: Bank of Scotland offers home loan at eight times joint salary
Peter and Josie Connell are City traders. They could not believe their luck when the bank approved their £1.5m mortgage to buy a dream Sussex farmhouse last December, despite monthly repayments almost equalling their combined take-home pay. Peter says: "We didn't lie. Last year we had guaranteed bonuses which nearly doubled our income, but this time they will be zero."
He says: "After four months, we had to give up. The bank refused a payment holiday because we admitted we had problems. We had to put the property back on the market. We are victims of irresponsible lending which was unsustainable."
Posted by little professor @ 12:06 PM (1040 views) Add Comment
17 Comments
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1. denzil said...
Call me old fashioned but if I was offered a loan at eight times salary I would certainly not be thinking to myself, "oh I can't believe my luck". What's "lucky" about it?!
And these idiots were "City traders". Why does that not surprise me!
2. Alanl said...
Innocent idiots.
They said 'We are victims of irresponsible lending'.
There are people who are (were?) city traders on 100k+ a year and they know this little about finances? crazy.
3. Game Over said...
Crazy lending is STILL going on, according to Jill Insley in yesterday's Observer she has anecdotal evidence to support the view that there are still self-cert deals and 10x loans being dished out.
I wonder why the article no longer features on the Observer's website. Luckly I saw the article from the print version and cut it out
4. george monsoon said...
These idiots took on a load that equalled almost their combined monthly salary. How did they expect this would pan out ?
City Traders .. ... yep.. just about sums it all right up!
5. Nickledeg said...
These snot gobblers aren't victims of anything. If they're traders they should be numerate. I'm saddened they haven't been decalred bankrupt
6. Uncle Fargas said...
"We were victims of irresponsible lending.". Of course you were, you poor things. That nasty bank - making you take on that great big loan.
7. timmy t said...
"We are victims of irresponsible lending which was unsustainable" Yes, and you are a complete moron who is guilty of irresponsible borrowing.
8. An Bearin Bui said...
'Victims of unsustainable lending'? Try 'morons' - that's a much better description of these people. Who on earth signs up to a loan for 8 times their income? The responsibility is equally shared between the two idiots who signed up to the loan, the broker who negotiated it and HBOS for taking them on as customers without verifying anything.
I love the blame wars now surfacing. None of these parties want to take responsibility for their own poor decision-making. They weren't lucky to get the loan, they were lucky to be able to sell the house for enough money to repay the bank.
9. holding out said...
These are the type of people who will milk the system. They are doubtless trying to claim irresponsible lending (which it is - but tough) and will no doubt sue and probably win. All because we can't be allowed to face up to our own responsibilities. We've been neutered because we have to be protected from our own stupidity.
10. matt_the_hat said...
I think the only thing that was unsustainable was the bonus
11. ontheotherhand said...
The bank says: "This loan was sold via an adviser, so it is the adviser's responsibility to satisfy themselves that the income quoted is correct and can be evidenced."
They still don't get it do they.
What they should say is, "We made a mistake in trusting brokers to do the checking on our behalf. We did not see that all they cared about was the upfront fee and that their is no downside to them for default. It is, with hindsight, not suprising there was lack of proper checking."
12. mark wadsworth said...
The delicious sweet irony of it all!
If they were city traders they were probably guilty of encouraging reckless lending in the first place. Do these people seriously expect any sort of sympathy?
13. Landedgentry said...
They made a bad trade and bet the farm on it (literally).
14. Will said...
dooohhhhh
15. doom&gloom said...
Peter says: "We didn't lie. Last year we had guaranteed bonuses which nearly doubled our income, but this time they will be zero."
Guaranteed bonuses? The thing about bonuses you see, is that they are a BONUS. You are not guaranteed to get them every year. Toss*r!
The only cloud in this silver-lining of a story is that the pair of 'city traders' managed to sell and repay the bank, and weren't sunk into years of negative equity culminating in bankrupcy and a lifetime of hounding from the banks.
16. dohousescrashinthewoods said...
Just lining up for a slap, but let's be fair, they were caught up in the midst of a hubristic fantasy that had everyone believing the Emperor really could keep borrowing to buy new clothes, providing debt could be serviced. They probably felt lucky because someone in the dark world of mortals (aka those for whom money is a quantity rather than a concept) was enlightened enough to see the new financial reality.
--
4. holding out ... "We've been neutered because we have to be protected from our own stupidity" - Health and Safety all the way! (I very much hope they'll be a distant memory when this depression's done) As a cutting anonymous quote put it:
- "The problem with the world today is stupidity. I'm not advocating a cull or anything, but let's just take the safety labels off things and let the problem solve itself".
If you're laughing, great, but don't get cocky. Just because you think you're clever doesn't mean you won't be caught out (I include myself in that).
17. Hilaryos said...
Game Over - Jill Insley's piece is still on the website. You'll find it here: http://www.guardian.co.uk/money/2008/oct/19/debt