MuayThai18 Posted August 3, 2020 Share Posted August 3, 2020 So today I was preparing company accounts for a property investor. He bought a house in Nov 18 for 200k with 75%/150k mortgage. In July 2019 he had it revalued at 340k and remortgaged at 75%. He basically got 100k cash after fees. What did he do with this 100k? Deposit on another property.... Bearing in mind he spent 10k sprucing the place up, where have you ever heard of a house increasing in 140k in just under 2 years? It's made me realise the mortgage brokers, surveyors, solicitors, and everyone else involved in the chain is dirty as hell. As long as he makes his monthly repayments the lender won't care and property only ever goes up so it won't be problem???? This game is rigged. It's like a massive Ponzi scheme Quote Link to comment Share on other sites More sharing options...
richmondtw Posted August 4, 2020 Share Posted August 4, 2020 10 hours ago, MuayThai18 said: It's made me realise the mortgage brokers, surveyors, solicitors, and everyone else involved in the chain is dirty as hell. As long as he makes his monthly repayments the lender won't care and property only ever goes up so it won't be problem???? This game is rigged. It's like a massive Ponzi scheme A valuation is just one person's opinion. The broker and solicitor have little to do with it the broker submits the application - if it is downvalued it is out of his hands. The sol processes the paperwork. If it is so rigged get involved. Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 4, 2020 Share Posted August 4, 2020 12 minutes ago, richmondtw said: A valuation is just one person's opinion. The broker and solicitor have little to do with it the broker submits the application - if it is downvalued it is out of his hands. The sol processes the paperwork. If it is so rigged get involved. If it is so rigged then it's a dangerous game. Quote Link to comment Share on other sites More sharing options...
qejunkie Posted August 4, 2020 Share Posted August 4, 2020 11 hours ago, MuayThai18 said: This game is rigged. It's like a massive Ponzi scheme Yes. Quote Link to comment Share on other sites More sharing options...
qejunkie Posted August 4, 2020 Share Posted August 4, 2020 11 hours ago, MuayThai18 said: He bought a house in Nov 18 for 200k with 75%/150k mortgage. In July 2019 he had it revalued at 340k and remortgaged at 75%. He basically got 100k cash after fees. Where is this house that went up >50% from 2018 to 2019? Quote Link to comment Share on other sites More sharing options...
Locke Posted August 4, 2020 Share Posted August 4, 2020 (edited) 1 hour ago, qejunkie said: Where is this house that went up >50% from 2018 to 2019? nvm Edited August 4, 2020 by Locke Quote Link to comment Share on other sites More sharing options...
24gray24 Posted August 4, 2020 Share Posted August 4, 2020 I wouldn't worry about it too much. Either something dramatic happened in the area ( eg a new hospital opening) or the valuer got it wrong/ committed fraud. Fraud works only when the market rises. When market falls, valuer gets sued by lender/ goes to jail. I'd ask the punter how come and note down his answer personally. There may be no one left in the country to jail apart from the accountant... Quote Link to comment Share on other sites More sharing options...
Hullabaloo82 Posted August 4, 2020 Share Posted August 4, 2020 This has crossed my mind too, more than once. I'm in a similar line of work as OP by the sounds of things and am tangentially aware of certain brokers/Ifas who seem to be able to drum up unlimited amounts of credit from seemingly average properties and get mortgages for people who seem ridiculously over extended. Why don't I just get involved? I've seen the flip side of this too, where a family member was over extended and lost the lot back in the last GFC. I expect a similar event is ahead of us. Oh yeah, plus I don't want to be a landlord. Quite happy with my one house, safe boring job and my savings and pension. Quote Link to comment Share on other sites More sharing options...
Hullabaloo82 Posted August 4, 2020 Share Posted August 4, 2020 8 minutes ago, 24gray24 said: I wouldn't worry about it too much. Either something dramatic happened in the area ( eg a new hospital opening) or the valuer got it wrong/ committed fraud. Fraud works only when the market rises. When market falls, valuer gets sued by lender/ goes to jail. I'd ask the punter how come and note down his answer personally. There may be no one left in the country to jail apart from the accountant... It's good practice for accountants to ask those sort of questions and corroborate the answer to ensure there isn't a mistake, OP is not going to jail over this. Ultimate responsibility for what goes in those accounts lies with the client. Quote Link to comment Share on other sites More sharing options...
richmondtw Posted August 4, 2020 Share Posted August 4, 2020 3 hours ago, Si1 said: If it is so rigged then it's a dangerous game. so do not get involved then Quote Link to comment Share on other sites More sharing options...
24gray24 Posted August 4, 2020 Share Posted August 4, 2020 56 minutes ago, Hullabaloo82 said: It's good practice for accountants to ask those sort of questions and corroborate the answer to ensure there isn't a mistake, OP is not going to jail over this. Ultimate responsibility for what goes in those accounts lies with the client. True, but what does get the accountant sent to jail is the conviction that the accountant a) knew what was going on and b) was getting a cut somehow. That applies double if the main men have left the jurisdiction. You have to hang an accountant from time to time in order to encourage the others, as the saying goes. But if said accountant is just a bit dim and takes clients reasonable explanation, he should be okay. He's not expected to be a detective. Quote Link to comment Share on other sites More sharing options...
JB1973 Posted August 4, 2020 Share Posted August 4, 2020 Maybe he bought the house below market value in the first place? Quote Link to comment Share on other sites More sharing options...
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