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It's Time To Take Responsibility

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http://business.timesonline.co.uk/tol/busi...icle6805962.ece

Fraud is an ugly word. But incompetence and greed are uglier still if you happen to be running a bank or a building society that piled into buy-to-let mortgages a few years back. How much more convenient to blame criminals for losses, rather than to admit to in-house shortcomings.

Chelsea Building Society is the latest to claim to be victim of huge levels of fraud, reporting that villains were responsible for £41 million of its probable loan losses in the six months to June. Last week the state-owned Bradford & Bingley said that its losses due to fraud had mushroomed to £271 million.

There certainly has been considerable mortgage fraud, usually centring on inner-city flats in Leeds, Manchester, Birmingham and Liverpool. Dodgy valuers and local solicitors conspired to come up with inflated valuations. Police and the Financial Services Authority are investigating dozens of suspicious cases. This is a real problem.

But for lenders to present themselves as wholly innocent victims in all of this is a bit rich. Property valuation is not an exact science. It needed greedy, gullible, spectacularly incurious lenders as well as dishonest developers and surveyors to make this scam work. How tempting not to look too closely when the customers were queuing up and the prospective bonus was growing by the day.

Some bankers are, at best, guilty of sloppiness in failing to examine loan applications properly and for accepting the views of distant, local estate agents, hardly the most independent of authorities, as gospel. The most casual inquiries into the reliability of valuations — valuations that in some cases were escalating by the day — should surely have rung alarm bells?

Chelsea had no experience of buy-to-let lending, yet in the space of a couple of years threw £2.5 billion at new landlords. Such an aggressive expansion of the loan book by complete tyros should have come under the most intense board scrutiny.

Chelsea has been transformed from a prudent and safe little building society to a near-basket case. It did not help that the management thought that Icelandic banks were a safe home for their spare cash. That was another £20 million flushed away.

This is the banking industry, and so it hardly needs adding that the man most closely associated with this calamity walks away unscathed. Chief executive Richard Hornbrook gets a £272,000 payoff and leaves to spend more time with his £4 million pension pot.

Why would it ring alarm bells? Escalating valuations meant bigger loans, bigger loans equal bigger sales, bigger sales equal bigger bonuses.

Only a fool would question it, clearly someone who didn't want to be a winner or wanted their colleagues to be poor.

This wasn't going to happen.

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same bankers were GUARANTEEING no checks on applications, relying on their trusted brokerboys.

where is the Legal Fiduduciary Duty here? why are the DTI ( or whomever they are called now) not prosecuting

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same bankers were GUARANTEEING no checks on applications, relying on their trusted brokerboys.

where is the Legal Fiduduciary Duty here? why are the DTI ( or whomever they are called now) not prosecuting

Because there might be one too many awkward questions and clearly one of those if there is systemic fraud, everyone who has bought legitimately has overpaid, and the banks housing stock on their books would also be over valued.

So the plan clearly is to stick one's head in the sand and go la la la very loudly.

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Banksters assets should be frozen/sequestrated until the fraud investigations prove they weren't complicit.

No different to Gordon freezing the Icelandic banksters assets.

Ditto Applegarth, Hornby, Blank, Goodwin.

Victor Blank in his interview with Peston says he is quitting because someone's head has to roll. Never mind retiring - how about being arrested. Would be a start..............

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Make a note of the name, Patrick Hosking.

This fraud should be widely reported in the media, it's good to see a Times journo who knows what's going on.

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same bankers were GUARANTEEING no checks on applications, relying on their trusted brokerboys.

where is the Legal Fiduduciary Duty here? why are the DTI ( or whomever they are called now) not prosecuting

They simply didn't care. The risk was transferred remember? Why no one has been arrested for selling dodgy MBS is one of life's mysteries. Well not really a mystery, if you have "own" the government and regulatory structure.

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Let's face it - absolutely no one is going to be prosecuted - 2007 lending levels are what everyone wants again. Just print money until we get there. I see nothing at all happening that makes me think otherwise :-(

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Let's face it - absolutely no one is going to be prosecuted - 2007 lending levels are what everyone wants again. Just print money until we get there. I see nothing at all happening that makes me think otherwise :-(

I think you'll find from the charts Spline produced from BoE figures yesterday, that lending from majors have just about reached 2007 levels.

What is missing is all the stupid lending from shell firms and others that sold MBS for Investment banksters.

the printing is irrelevent...it is just a fiddle to prop up insolvent banks...makes balance sheets nice and tidy.

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Banksters assets should be frozen/sequestrated until the fraud investigations prove they weren't complicit.

No different to Gordon freezing the Icelandic banksters assets.

Ditto Applegarth, Hornby, Blank, Goodwin.

Victor Blank in his interview with Peston says he is quitting because someone's head has to roll. Never mind retiring - how about being arrested. Would be a start..............

You have left off the name of the guy probably the most responsible - "Sir" [Knighted by faggot Brown] James Crosby - formerly boss of HBOS.....

Watch the video - http://video.google.co.uk/videoplay?docid=...75&hl=en-GB -

CROSBY oversaw MASSIVE, MASSIVE, MASSIVE Mortgage Fraud/LIAR LOANS at HBOS over many, many years..............

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I think you'll find from the charts Spline produced from BoE figures yesterday, that lending from majors have just about reached 2007 levels.

What is missing is all the stupid lending from shell firms and others that sold MBS for Investment banksters.

the printing is irrelevent...it is just a fiddle to prop up insolvent banks...makes balance sheets nice and tidy.

We've got a LONG, LONG way to go before this all plays out....

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