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Lying For A Mortgage....

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Lying for a mortgage! How families are cheating to pass strict new lending test

Homebuyers are so scared of failing tough new lending tests they are lying about when they plan to start a family – and even hiding how often they buy takeaway coffees, a report reveals.

Would-be borrowers are buying luxury items with cash to disguise their spending from banks and are temporarily cancelling television subscriptions to help ensure their application is approved.

The deception follows the introduction last year of the Mortgage Market Review, which requires banks to quiz borrowers in more detail to make sure they can afford their repayments.

The questions are supposed to prevent a return to the reckless lending which led to the financial meltdown of 2008.

But lenders have been accused of launching a ‘Spanish inquisition’ and refusing mortgages for trivial reasons for fear of being punished by regulators.

Intrusive questions include whether a borrower plays golf, the price of their haircuts or if they eat steak.

What could possible go wrong if you cut your spending prior to getting a mortgage...

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Does the bank get to look at your statements for the previous few months?

12 months of statements would show you if someone's actually frugal (Do 12 months of frugality and would you ever go back to wasting money?)

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Your spending habits can change depending where you live. I once lived in a flat with a tiny kitchen close to several take aways and small supermarkets. The amount I spent on food was quite high. We moved less than a mile away and actually had a kitchen, the takeaways were far less accessible, so our spending on food dropped a lot.

If they are still spending on luxury items, but using cash to hide the transaction. The money is still being spent, so that is an issue with how the banks assess that kind of discretionary spending.

And who has a TV licence these days with the internet and availability of half decent on demand services, which cost significantly less.

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Watching BBC 2's The Bank - A Matter of Life and Debt - the other night it was interesting to hear a Nat West Mortgage Adviser referring back to the days when banks he had worked for took anyone's statement of income at face value - no checks. He said this quite openly. "50K?" ( claimed earnings). Sign here!....We never checked..".

28.20 mins in.

http://www.bbc.co.uk/iplayer/episode/b061xf9j/the-bank-a-matter-of-life-and-debt-3-lending

I doubt he's ever given a second thought to the consequences of that attitude, or any possible relationship it might have to both mortgage fraud and rampant HPI.

Edited by juvenal

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They're not cheating.....IT'S FRAUD, A CRIMINAL ACT

No its not its adjusting your spending to reflect the fact you will have a mortgage to pay, something the morons who assess mortgage applications seem unable to comprehend.

I went through this nonsence with the Nat West who turned down a mortgage application because I was spending too much of my income, pointing out that £2,500 a month was discretionary spending that I could stop at any time and I only needed an extra £800 to pay the larger mortgage was too complex a concept for the box ticker to understand. Had the same problem with an application to the Chelsea, eventually got an approval from the Woolwich and surprise surprise no problems paying the mortgage - just a few less visits to Dabbous and weekends away.

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I think they look at least 6 months, probably 12 months.

Its mainly to pick out patterns and stuff like child care, which can be *huge* - £500+/month

Unsubscribing to Sky for a few months is not going to cut it.

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No its not its adjusting your spending to reflect the fact you will have a mortgage to pay, something the morons who assess mortgage applications seem unable to comprehend.

I went through this nonsence with the Nat West who turned down a mortgage application because I was spending too much of my income, pointing out that £2,500 a month was discretionary spending that I could stop at any time and I only needed an extra £800 to pay the larger mortgage was too complex a concept for the box ticker to understand. Had the same problem with an application to the Chelsea, eventually got an approval from the Woolwich and surprise surprise no problems paying the mortgage - just a few less visits to Dabbous and weekends away.

They just notice is goes out.

They cannot tell whether you spend it on whores + drugs or childcare.

How do they know you can stop spending it or not?

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They just notice is goes out.

They cannot tell whether you spend it on whores + drugs or childcare.

How do they know you can stop spending it or not?

Well yes, that's the problem, isn't it?

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They may regret their lies, to buy at these prices, when prices fall.

Oh well.

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i had trouble getting a mortgage because i did not have credit card and i bounced money around current account to get best interest rate.

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They're not cheating.....IT'S FRAUD, A CRIMINAL ACT

Yes. It was obvious from the begining of MMR and the whole hype about it that it was - yet another farce.

None of these politicians/banksters/VI's would lend their own money to people who can only afford (through other loans/credit cards) only 5% deposit and who moan about 2% stamp duty (they can hardly afford even that small amount.

Would anyone sane lend their OWN money to the above people after asking them idiotic questions whether they can afford the repayments after buying the coffee/steak/gym membership?

Of course not.

This thievery can only happen with their "invention" of electronic money and we are all on hook for any failure of "hard working home owners" to pay off their mortgages.

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They just notice is goes out.

They cannot tell whether you spend it on whores + drugs or childcare.

How do they know you can stop spending it or not?

Because I had to go through my bank and credit card accounts in detail explaining what every item was.

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I know of one soul who very recently, as part of similar such advance planning for a mortgage application, had requested that (and got) his regular monthly salary 'split' into two separate bank accounts. One account receiving the bulk of the money and the other a smaller amount - which was intended to be used to hide any possible spending that might be frowned upon by the lenders for whatever reason he could not anticipate.

It was not until after this that he dopily realised that he still received a single payslip each month, showing the full amount, and that these would likely be asked for anyway! :wacko:

Edited by anonguest

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