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DrMartinSanchez

I Refused A Liar Loan In 2006

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Dear HPC,

Here is the story of how I refused a LIAR LOAN:

2006, there's a property I like. I start looking at mortgages.

I find a Mortgage Consultant - Let's call her "J".

J is an employee at a financial advice company that changes name every few months. I wish I'd known that bit at the time.

My single income is not really impressive, but J says I'm guaranteed a mortgage of £[amount], the repayments will be affordable because I am not a big spender.
She even gives me a business card where she's written "£[amount] Guaranteed". I'm happy with this.

(I had absolutely no idea about income multiples back then, but it was slightly above 5x income.)

A few days later, we meet in her office to fill in and sign the paperwork.

A few days later J is on annual leave. Her colleague calls for a routine check:

"Can you confirm your income of £XX,000 ?"
"Erm... I don't earn that much. You sure you have right person?"
"Well it's your name and details on the application."
"Please can you email me the documents?"

...

As you have probably guessed by now, it turns out J had completed an alternate version of my mortgage application:
- Nearly doubled the income figures
- Wrote a false declaration saying that I had a volatile income that relied mostly on bonuses.
- Forged my handwriting and signature

What do you do in this situation?

I speak to the Police. They don't care. J hasn't committed an offense or crime against me. In fact she's a good person who's "trying to help you on the property ladder".

I speak to my solicitor. No reaction, just a shrug. Lying on a mortgage application? Everyone else does it!

I speak to the FSA. They receive all the documents. They "investigate" for a couple months. I get a few hundred £ compensation. J gets a slap on the wrist.

2016, she is still a Mortgage Consultant.

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I speak to the Police. They don't care. J hasn't committed an offense or crime against me. In fact she's a good person who's "trying to help you on the property ladder".

I speak to my solicitor. No reaction, just a shrug. Lying on a mortgage application? Everyone else does it!

I speak to the FSA. They receive all the documents. They "investigate" for a couple months. I get a few hundred £ compensation. J gets a slap on the wrist.

2016, she is still a Mortgage Consultant.

Fascinating. Horrifying and fascinating. Thanks for posting.

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I spoke to RBS about a mortgage back before the financial crisis, after giving my details and being told what I could borrow, she then asked would I like to save the application. I said yes and she responded that the amount of children I have will impact how much I can borrow due to affordability and if I had less I could borrow more. I questioned what she meant and she then said, if I didn't save it and decided to apply later if I stated less dependents they could lend me more :-|

She was basically telling me to lie on my application if I wanted to borrow more, this was RBS.

Northern Rock on the other hand, didn't require me to lie, they were prepared to lend me more than I could actually afford to repay and also give me a 25% unsecured loan on top of that. Supposed to help me do work on the house, but in reality it would just be used to pay the mortgage

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Yep, it what kept prices going up past the point where they should have reversed. Throw in FFL, HTB, and ZIRP, and we have over 20 years of unsustainable HPI!

Let's see how far they can push HTB and Shared ownership before the masses see what a Ponzi the whole housing market has become! I'm waiting for HTB (loan to get a loan) to buy 5% of a bedsit! Probably with the aliittle help from the Bank of Mum and Dad to get the HTB loan! 'Look at me daddy, I'm on the propertieee ladder!' :P

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In 1979 for some reason I decided I should get a mortgage and buy a house. I think I made this decision purely because friends told me it was a good idea and everybody was doing it. I assumed mortgages worked just like the bank loan I already had to buy a car therefore I phoned my bank and they booked me an appointment with the manager. The manager turned out to be an old-school Captain Mainwaring and during the appointment I felt very much like a naughty boy in the headmaster's office. He asked me sternly how much of a deposit I had saved! This threw me a bit as they had loaned me 100% of the money for the car so I breezily told him I hadn't saved any. I couldn't answer any of his other questions either such as what kind of a house did I think I wanted (I hadn't thought.) Boy was he cross and kicked me out of his office.

That's the way it used to work - only a few years later I was stunned to be on the receiving end of a liar-loaner desperately trying to sell me twice the amount I wanted.

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I was 18 that same year and went to see my bank manager about a mortgage.

The house was £4,000 and I had £1,000 cash and had just been gifted a £1,000 bond that matured in 6 months. I was earning just over £2,000 p.a.

I wanted a temporary loan for 6 months until the bond matured and a 50% mortgage at 1x salary.

Mr Stead from Yorkshire Bank refused saying it was too risky for me to put so much money into property.

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I was 18 that same year and went to see my bank manager about a mortgage.

The house was £4,000 and I had £1,000 cash and had just been gifted a £1,000 bond that matured in 6 months. I was earning just over £2,000 p.a.

I wanted a temporary loan for 6 months until the bond matured and a 50% mortgage at 1x salary.

Mr Stead from Yorkshire Bank refused saying it was too risky for me to put so much money into property.

Even now people tell me it's not up to banks to dictate how much they can borrow. They can't understand that the risk is to the shareholders/depositers (and tax payers!)... Not just of them going bankrupt!

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