From: Phil Deane 
Newsgroups: uk.legal uk.finance
Subject: Re: exaggerating your income to get a mortgage
Followup-To: uk.legal
Date: Mon, 03 Nov 2003 23:09:27 +0000

half_pint wrote:

> "Doug Ramage"  wrote in message
> news:bo6ad4$18b924$1@ID-34015.news.uni-berlin.de...
>>
>> "half_pint"  wrote in message
>> news:bo66vv$186smu$1@ID-204080.news.uni-berlin.de...
>> > "dave blacker"  wrote in message
>> > news:9a1f8a4.0311030306.6ca7b14e@posting.google.com...
>> > > The other night The Money Programme did an item about people being
>> > > encouraged to lie about their income in order to obtain mortgages.
>> > >
>> > > This has me wondering: as well as the advisors who encouraged this
>> > > (and who have presumably been reprimanded by their employers) do
>> > > those borrowers have good cause to worry now?
>> > >
>> > > I'd have thought lying about your income to obtain a mortgage that
>> > > the lender's rules would otherwise not allow you to have is some sort
>> > > of fraud. Do they risk prosecution? Or would the lender just cancel
>> > > the mortage? And if the latter, I wonder what the consequences will
>> > > be for those borrowers who are affected?
>> >
>> > You have to consider what they obtained by deception, in monetary terms
>> > absolutely nothing as they will have to repay about 3 times what they
>> > borrowed.
>> > All the bank cares about is making money, and as the borrowers
>> > probably had to pay an insurance fee (mortage indemnity guarantee?
>> > mig?) to ensure the lender does not lose out, then I cannot see why the
>> > lender should care about the financial status of the lender.
>> > You have to remember you could loose your job the next day and that
>> > noone can guarantee their income over the next 25 years, indeed 25
>> > weeks in most cases.
>> >
>> >
>> >
>>
>> Legally, they have obtained "a pecuniary advantage" by deception - i.e.
> the
>> loan.
>>
>> Although I have not read a MIG policy recently, I doubt it covers the
>> dishonesty of the lender.
> 
> I would image it merely covers the lender making a loss on reposession
> whatever the circumstances, after all the lender is not signing the
> application form.
> You probably have never read one because it is held at head office
> under lock and key, although you are expected to sign without
> reading the terms and conditions.
> Pretty shocking practices really in what is an industry riddled with
> corruption.

The excess on a MIG is usually the first 20% or there abouts, so not ideal
for the lender.


-- 

Phil Deane
http://www.MiracleExpress.force9.co.uk