eric pebble Posted February 11, 2009 Author Share Posted February 11, 2009 (edited) PRESS RELEASE FROM 29th OCTOBER 2003 --- YES - 2003!!!!! http://www.bbc.co.uk/pressoffice/pressrele..._mortgage.shtml Press Releases & Press Packs NOTE: [LAST LINE] "The Money Programme requested an interview with HBOS Chief Executive James Crosby but he declined to be interviewed." 29.10.03 BBC NEWS The Money Programme uncovers massive mortgage fraud BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages. And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin. An undercover investigation for The Money Programme – Mortgage Madness (Wednesday 29 October, 7.30pm, BBC TWO) shows adviser Fraser Wright at Townends saying: "I've done it for myself and for my personal friends. Just remember what you put on the form and make sure the mortgage is always paid." Mr Wright told the programme's undercover researcher he had claimed to have earnings of £100,000 a year on his own mortgage application. "It's a walk in the park," he boasted. "They don't know." Martin Ridge, a mortgage adviser recommended by Haart, told the undercover researcher to state their income as £56,000. He said: "It is lying, but that's what you have to do." Dr Desmond Fitzgerald, an expert in financial markets who advises financial institutions and regulators, said: "Over the past two years most forecasters, including myself, expected the housing market at best to stabilise and more likely to fall. "Instead it's powered ahead. Now clearly if there is this extra flow from these fraudulent self-certified mortgages, that will push hundreds of millions of extra cash flow into the housing market. "So you get this sort of self-feeding frenzy, a real bubble effect." Undercover researchers from The Money Programme posing as first time buyers talked to advisers recommended by ten estate agents in Ealing, West London. Nine encouraged them to take out self certified mortgages – where borrowers simply state their incomes and lenders promise not to check. All nine advised the buyers they would have to lie about their true income to secure a larger mortgage, raising the amount which could be borrowed from around £150,000 to £220,000. In Manchester three out of seven mortgage advisers in Didsbury recommended exaggerating the researchers' incomes. Tony Shaw QC, a criminal lawyer specialising in serious fraud, told The Money Programme that borrowers could be in serious trouble if caught. He said: "A person who fills out a form knowingly entering a false statement about his income or his occupation is at risk of going to prison. It is a serious offence." For mortgage brokers who advise borrowers to lie, the penalties could be even more severe. The Money Programme found that during the investigation brokers advised the undercover researchers to lie on applications for self-certified mortgages from, among others, The Bank of Scotland, The Mortgage Business and Birmingham Midshires. All three are part of the Halifax Bank of Scotland Group – Britain's biggest mortgage lender. The Money Programme visited three Birmingham Midshires high street branches in the West Midlands. In all three the undercover researchers were offered self-certified mortgages far bigger than the official Birmingham Midshires three and one quarter times salary multiple allows. The company has since suspended three mortgage consultants. In the main Birmingham Midshires City Centre branch, HBOS adviser Gurjit Sandhu said he had helped a client who wanted to buy a £400,000 house. Mr Sandhu said: "His income was just about the early £30,000s. It wasn't exceptionally good. He was having a mortgage at £340,000 and to borrow that I showed he had an income of £104,000." Other brokers caught on camera advising the practice were recommended by Rolfe East, Townends, Kinleigh Folkard & Hayward, Bairstow Eves Countrywide, Haart, Barnard Marcus, JAC Strattons, Northfields, Roberston Smith and Kempson. All recommended the self-certification route. Dr Fitzgerald said people not only faced criminal sanctions but also the prospect of financial ruin. "If we have a six times multiple or more then you end up effectively paying 50% or 55% of your after-tax income in mortgage repayments and a lot of people would find that very difficult, if not impossible to manage," he said. In the week before broadcast The Money Programme informed all those who had been secretly filmed about the programme and the allegations in it. Many of the estate agents and financial advisers the programme approached have launched enquiries. The Money Programme requested an interview with HBOS Chief Executive James Crosby but he declined to be interviewed. Notes to Editors Self-certified mortgages: Self-certified mortgages were first introduced some 15 years ago to cater for self-employed people with erratic or difficult to prove earnings who had problems obtaining a traditional mortgage. At first, borrowers' accountants were asked to verify the incomes people claimed. But in recent years, with increased competition, these income checks have mostly fallen away and now even salaried employees, with incomes that are easily checked, can get a self-certified mortgage. Most self-certified mortgages require borrowers to put down a significant deposit, typically 15% of the price of a property. This protects lenders if borrowers default. The self-certification mortgages offered by most major lenders require an income declaration to which a stipulated multiple is applied. In the case of the HBOS brand BM Solutions, it was 3.25 at the time of researching this programme, the HBOS brand Bank of Scotland applied a 3.5 multiple. There is a small number of self-certification mortgages which do not require any statement of income. The lenders in this case undertake what they call an "affordability test" to see if a borrower is likely to be able to meet the repayments they are taking on. Sales of self-certified mortgages have been growing on average at over 27% a year over the past five years. Edited February 11, 2009 by eric pebble Quote Link to comment Share on other sites More sharing options...
Guest mattsta1964 Posted February 11, 2009 Share Posted February 11, 2009 Good stuff Eric Thanks for the reminder What a bunch of scoundrels. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 11, 2009 Author Share Posted February 11, 2009 (edited) WATCH THAT 2003/4 BBC MONEY PROGRAMME HERE http://video.google.co.uk/videoplay?docid=...75&hl=en-GB Edited February 11, 2009 by eric pebble Quote Link to comment Share on other sites More sharing options...
huw Posted February 11, 2009 Share Posted February 11, 2009 Eric- don't worry. Pat has a hot line to Labour HQ and he seems to think Gordon will be gone by the end of the week.It's not worth raising your blood pressure over Just the one question remains- where did the money all go? In summary, it paid for the party we've been having over the past several years. Some went to fund our trade deficit, and is now sitting in the savings/sovereign wealth funds of countries that ran a surplus with us. Some was hoovered up by taxation (all that stamp duty and extra VAT from the boom). Some got paid out in wages/bonuses, and ended up banked instead of being spent on imports. And some is in STR pots. Quote Link to comment Share on other sites More sharing options...
chi Posted February 11, 2009 Share Posted February 11, 2009 Did you put up the sexual harassment suit as well? Ehh?Wot? Quote Link to comment Share on other sites More sharing options...
se7ensport Posted February 11, 2009 Share Posted February 11, 2009 (edited) PRESS RELEASE FROM 29th OCTOBER 2003 --- YES - 2003!!!!!http://www.bbc.co.uk/pressoffice/pressrele..._mortgage.shtml Press Releases & Press Packs NOTE: [LAST LINE] "The Money Programme requested an interview with HBOS Chief Executive James Crosby but he declined to be interviewed." 29.10.03 BBC NEWS The Money Programme uncovers massive mortgage fraud BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages.......... ....Sales of self-certified mortgages have been growing on average at over 27% a year over the past five years. Funnily enough I've linked to this article from snowblog with success (last comment) http://blogs.channel4.com/snowblog/2009/02...ed-and-friends/ but the biased BBC will not add the exact same wording to Prestons Blog - I deliberately timed it to post at the top of the list so the majority of readers had a chance to see it but as you'll see number 8 is "This comment has been referred to the moderators". There is no reason for it as it does not breach any of the house rule as its purely a quote from the fkin BBC! http://www.bbc.co.uk/blogs/thereporters/ro...mp=False#dnaacs I reposted at number 107 along with a complaint about censorship and they publish it, likelihood of being read there by the majority of blog readers is slim Edited February 11, 2009 by se7ensport Quote Link to comment Share on other sites More sharing options...
juvenal Posted February 11, 2009 Share Posted February 11, 2009 One for Eric's scrapbook. Apologies if already posted: Money Guardian 7.2.09 Self cert loans no longer a dead cert. 'Self cert loans have been hugely controversial. They have been dubbed LIAR LOANS and been mis-sold by some firms' Quote Link to comment Share on other sites More sharing options...
jonpo Posted February 12, 2009 Share Posted February 12, 2009 this memo is a classic .... 2.8 But let’s start with the cause and this fairly obvious proposition: even non-bankers with no “credit risk management” expertise, if asked (and I have asked a few myself), would have known that there must have been a very high risk if you lend money to people who have no jobs, no provable income and no assets. If you lend that money to buy an asset which is worth the same or even less than the amount of the loan and secure that loan on the value of that asset purchased and, then, assume that asset will always to rise in value, you must be pretty much close to delusional? You simply don’t need to be an economic rocket scientist or mathematical financial risk management specialist to know this. You just need common sense. So why didn’t the experts know? Or did they but they carried on anyway because they were paid to do so or too frightened to speak up?2.22 To mix a few well known similes / metaphors / stories, the current financial crisis is a bit like the story of the Emperor’s new clothes. Anyone whose eyes were not blinded by money, power and pride (Hubris) who really looked carefully knew there was something wrong and that economic growth based almost solely on excessive consumer spending based on excessive consumer credit based on massively increasing property prices which were caused by the very same excessively easy credit could only ultimately lead to disaster. But sadly, no-one wanted or felt able to speak up for fear of stepping out of line with the rest of the lemmings who were busy organising themselves to run over the edge of the cliff behind the pied piper CEOs and executive teams that were being paid so much to play that tune and take them in that direction http://ftalphaville.ft.com/blog/2009/02/11...the-moore-memo/ Buy that man a drink Quote Link to comment Share on other sites More sharing options...
South Lorne Posted February 12, 2009 Share Posted February 12, 2009 ....architects of HPC....... Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted February 12, 2009 Share Posted February 12, 2009 What did the Crosby report say, l think it was on the lines of bring back 100-125% mortgages, shame the banks aren't helping as they all want around 30-40% loan to values now. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 What did the Crosby report say, l think it was on the lines of bring back 100-125% mortgages, shame thebanks aren't helping as they all want around 30-40% loan to values now. As far as I remember - he was telling the govt to pump £100 MILLION into the "housing market".... Go figure...... Quote Link to comment Share on other sites More sharing options...
THE BALD MAN Posted February 12, 2009 Share Posted February 12, 2009 What did the Crosby report say, l think it was on the lines of bring back 100-125% mortgages, shame thebanks aren't helping as they all want around 30-40% loan to values now. I trust that the report will be filed in a suitable place (the bin) or will crash Gordan still try to implement it Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 (edited) The BBC Money Programme realize a MASSIVE scam is in the offing.... IT IS 2004!!!!! http://news.bbc.co.uk/1/hi/business/3478635.stm ------------------- Self-cert mortgages could skew market Many lie about their income in their mortgage application Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing. As a result, a flood of illicitly obtained mortgage money may have been pouring into homeowners' pockets, boosting both house prices and consumer spending. The Money Programme started investigating mortgages last year. [2003!!!!!!!] After months of undercover work, our film "Mortgage Madness" finally answered one of the great puzzles of the British housing boom: How some people were managing to meet the soaring cost of housing. The answer was so simple, we found it almost unbelievable. Some major British lenders had changed their lending rules in a way which allowed borrowers to get far bigger mortgages than they were entitled to. All a borrower had to do was to lie about how much they earned. Prudent lending Lying on a mortgage application form is a criminal offence. But it is a crime some lenders had made disarmingly easy to commit. For decades, the maximum a borrower could raise on a mortgage had been set as a multiple of income. On a typical multiple of three-and-a-half times income, the most someone earning £30,000 would be able raise on a mortgage was £105,000 - that is 3.5 x £30,000. The income multiple rule was rough and ready, but it was effective in stopping borrowers from borrowing more than they could afford and lenders from lending more than was prudent. The rule worked because lenders used to insist that borrowers proved the incomes they claimed, either by producing evidence from their employers or, if they were self-employed, profit figures from their accountants. Excessive lending But in the increasingly frenzied scramble for business during the housing boom, Britain's biggest mortgage lenders increasingly began to offer a new kind of mortgage where proof of income was not required at all. With these new so-called "self-certification" mortgages, borrowers simply stated their income and lenders made it clear they would not check the amount borrowers claimed. Known in the trade as "self-certs" these mortgages, with their lack of income checks, made it simple for borrowers to lie about what they earned. Having lied, the lender's multiple would be applied to the inflated earnings figure and the maximum mortgage a borrower could get would be increased. Buying power Last year when we visited Ealing, a house price hot-spot in West London, nine out of ten of the mortgage advisers we consulted recommended we should lie about our £30,000 salary, falsely boosting it to over £50,000 on our mortgage application form. The effect of the lie was dramatic. Instead of the £105,000 or so we could have raised on an honest mortgage application, suddenly we were being offered mortgages of around £185,000, giving us vastly more buying power to pump into the local housing market. In Manchester house prices are lower, but nevertheless three out of the seven advisers we consulted suggested that we lie for a bigger mortgage. When we visited high street branches of Birmingham Midshires, part of Britain's biggest mortgage provider, the Halifax Bank of Scotland group, three out of three of the advisers we consulted offered us self-cert mortgages of around six times our income for which we would have to have lied. One of these advisers boasted of getting a client a mortgage of around ten times income by inflating his salary to over £100,000. Market distortion The potential boost to house prices from this extra cash was obvious. How big it was depended on how many people were lying on self-cert mortgages and how much additional borrowing was being generated as a result. On the day "Mortgage Madness" was broadcast, the Council of Mortgage Lenders, the lenders' trade association, were quick to play down any suggestion that lax lending by some of their members could have distorted the housing market. It could not have happened, they insisted, because the self-cert mortgages were a tiny part of the market; less than 1%. Large problem This 1% figure was so wildly at variance with what we had found on the ground that we didn't believe it. We began a second investigation to try to find out how many mortgages there really were where lenders did not ask for proof of borrowers' incomes. The result of this second investigation is astonishing. Far from being a piffling 1% or less of the market, it turns out it is huge. One leading broker we consulted estimated that up to 30% of new mortgages are now issued without lenders asking for any proof of income. Wall of silence Trying to get an accurate estimate has not been easy. We first tried surveying the top mortgage lenders, asking each how many self-cert mortgages they did. The survey flopped because many self-cert lenders did not reply. Instead they referred us back to their trade association, the CML, whose 1% figure we had found incredible in the first place. When we finally got an answer from the CML, it turned out their 1% figure had only ever been a guesstimate. In a splendidly circular argument, the CML told us they had not thought it necessary to try to find out a more accurate figure for self-certs because they did not think fraud was a serious problem meriting such work. Fast-tracks Meanwhile, the Financial Services Authority, which had been investigating self-certification mortgages following our first programme, came out with an estimate of their own: That self-cert mortgages were around 6% of the market. 6-7% is vastly bigger that the CML's 1%, but it still seemed far lower than we thought possible from our first investigation. Then we came across another kind of mortgage where proof of income is not required which seemed to us to explain the difference between the FSA's 6% estimate and what we believed we had found. Mostly designed for people who can put down a 25% deposit or more, typical for second time buyers, these mortgages are called "fast-tracks" because, without proof of income, they are far quicker to process than traditional mortgages. But, as with self-certs, not asking for proof of income means fast tracks are also open to abuse. Choice We were sure we were on the right track when it turned out that half the self-cert mortgages we had been offered in Ealing were in fact fast-tracks. The lender offering them, Northern Rock, is the seventh biggest provider in Britain. Northern Rock were quick to point out an important difference between fast-track and self-cert mortgages. Though neither requires proof of income, with fast-track mortgages lenders reserve the right to ask for proof of income if they choose. The right to check might seem to make it far harder for borrowers and brokers to lie, compared with self-certs. Surprisingly, it seems, that is not the case. Brokers told us that it is easy to get round the checks most lenders make on fast-tracks. Checks are few and far between and, even if one is asked for, it is easy to close the case, tell the lender the borrower is not proceeding with the mortgage, and then try to borrow from another lender. New title Lenders have other checks: For example, comparing the amount a borrower claims to earn with the job they say they do. It is easy to get around that as well. A deft change of job title, say from "nurse" to "medical staff", will easily justify a far higher income on the application form. But the over-riding reason why many lenders seem not to be concerned about rooting out fraudulent applications is the size of the deposit a borrower has to put down to qualify for a fast-track or self-cert mortgage. Cushioned If everything goes wrong for the borrower and they can no longer meet the payments on a fraudulently obtained outsize mortgage, the lender is unlikely to lose money. Even if a borrower defaults, a lender can repossess their home and sell it to recover their money. The deposit gives lenders a comfortable cushion against falling house prices since prices would have to fall by more than the deposit before a lender faced any loses. Borrowers meanwhile would have lost their deposits and their homes. Even if they wanted to know how many fraudulently inflated loans they have on their books, it would be hard for lenders to find out. In their paperwork, falsely inflated incomes match the large mortgages they justify, so the lies are hard to see. And, while they lend even more money - mortgage lending is now at an all-time high - there seems little motivation for lenders to probe too hard. Mounting debts But crucially, what reassures many lenders that there is not a serious problem with overborrowing through fraud is the level of defaults and repossessions which are now running at their lowest level since the last housing recession in the early 1990s. That picture may be about to change. Last week the Department of Trade and Industry published some disturbing statistics. Household debt now stands at 134% of income, a record figure. The number of personal bankruptcies has increased by 30% on a year ago and is now at its highest level since records began. Most ominously for the housing market, a Financial Services Authority survey published last month found that with a 1% rise in interest rates 44% of mortgage borrowers said they would be struggling with their borrowings. Since that survey was undertaken last September, interest rates have already risen by half a percentage point and are forecast to go on rising. If some mortgage lenders have been living in a bubble of complacency, the bubble may soon be rudely punctured. The Money Programme on self-cert mortgages was broadcast on BBC Two on Wednesday 11 February [2004] at 1930 GMT. ----------------------------- http://news.bbc.co.uk/1/hi/business/3478635.stm Edited February 12, 2009 by eric pebble Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 Well done for the Wikipedia updates. We need everyone to know about the cause of the crisis. How bad is the 'liar loan' problem? http://www.citywire.co.uk/personal/-/blogs....aspx?ID=311303 Ha!!! I love the last comment: "Well, the chickens have all come home to roost now big-style, haven't they? Any bets on how soon it will be before the banks dream up some new replacement schemes to spend their £500bn taxpayers' windfall on to make some more outrageously fat bonuses?" Yer well......... Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 The image of Kirsty with a strap-on that conjoured up has put a downer on my afternoon. Quote Link to comment Share on other sites More sharing options...
ʎqɐqɹǝʞɐɥs Posted February 12, 2009 Share Posted February 12, 2009 Eric you should set yourself up a nice line of James Crosbys face dartboards. Quote Link to comment Share on other sites More sharing options...
Bosh Posted February 12, 2009 Share Posted February 12, 2009 The BBC Money Programme realize a MASSIVE scam is in the offing.... IT IS 2004!!!!!http://news.bbc.co.uk/1/hi/business/3478635.stm ------------------- Self-cert mortgages could skew market Many lie about their income in their mortgage application Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing. As a result, a flood of illicitly obtained mortgage money may have been pouring into homeowners' pockets, boosting both house prices and consumer spending. Eric, I watched this programme as you well know. I totally agree that one of, in fact the most significant reasons for rocketing house prices was because of self certs (Liar Loans). I admire your crusade. I am surprised that apart from a few articles in the press, not one party/organisation has flagged this and decided to run with it. If people really did take the time to watch this (PLEASE DO IT) I would be surprised if they did not come to the same conclusion. This should have been pinned by the powers to be as requested last year and whoever our next spokesperson turns out to be, they should include this crminal debacle in future press coverage. The money programme need to follow this up :angry: Keep going Mr P......... Bosh Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted February 12, 2009 Share Posted February 12, 2009 (edited) But the banks relied on so called liar loans. Without them, the whole scam would have collapsed. They relied on ever increasing house prices. If they only loaned to the sensible house prices would be around a £100,000. They needed big loans they could parcel up and sell on. Since these loans have been withdrawn house prices have crumbled and will continue to do so. Loan to values around 30% will bring house prices back to around £100,000 which is more than likely where they would have peaked without self cert liar loans. Edited February 12, 2009 by time 2 raise interest rates Quote Link to comment Share on other sites More sharing options...
AnotherSTR Posted February 12, 2009 Share Posted February 12, 2009 The money programme need to follow this up :angry: Keep going Mr P......... Bosh This programme demonstrates that no one can claim they din't know about the problem of mortgage fraud and the inevitable effect on house prices. I'll be amazed if the media in general follow-up on the Money Programme link itself. They should, but their inability to hold the government to account on any issue is hopeless. Of course one other aspect is that highlighting this fraud so close to home blows the "started in America" line out the window. Stick that where the sun doesn't shine Mrs Cooper! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 But the banks relied on so called liar loans. Without them, the whole scam would have collapsed. Theyrelied on ever increasing house prices. If they only loaned to the sensible house prices would be around a £100,000. They needed big loans they could parcel up and sell on. Since these loans have been withdrawn house prices have crumbled and will continue to do so. Loan to values around 30% will bring house prices back to around £100,000 which is more than likely where they would have peaked without self cert liar loans. Agree 100%! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 12, 2009 Author Share Posted February 12, 2009 Keep going Mr P.........Bosh Thanks Bosh --- Will do! Quote Link to comment Share on other sites More sharing options...
AnotherSTR Posted February 13, 2009 Share Posted February 13, 2009 As the weeks go by the weight of evidence against "the one eyed scottish git" piles up. When will people wake up! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted February 13, 2009 Author Share Posted February 13, 2009 As the weeks go by the weight of evidence against "the one eyed scottish git" piles up. When will people wake up! On the evidence of the last decade.....??............... They're dead! Can they wake up from the dead?? Quote Link to comment Share on other sites More sharing options...
eric pebble Posted March 5, 2009 Author Share Posted March 5, 2009 As the weeks go by the weight of evidence against "the one eyed scottish git" piles up. When will people wake up! MAYBE they FINALLY are now..... Quote Link to comment Share on other sites More sharing options...
A.steve Posted March 5, 2009 Share Posted March 5, 2009 Whatever happened to Paul Moore's 30 damning documents? Quote Link to comment Share on other sites More sharing options...
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