U.K. borrowers encouraged to lie in their applications

[Akrasia]

According to a BBC report, Half of the U.K. sub Prime market involves borrowers who 'self certify' their income and work situation.

Insiders have told journalists that many brokers have been encouraging potential borrowers to exaggerate their incomes in order to secure a mortgage that they probably can't afford.

A former broker in the industry told BBC Radio 4's File On 4 that some advisers in the sector tell clients with low incomes to inflate their earnings on application forms to get outsize loans, which they often cannot afford.

'Inflated income'

Inflating the client's income is seen as an easy way for brokers to get the deal passed.

One borrower whose real income was £25,000 told the BBC he was advised to double that on his mortgage application.

He got a loan of more than eight times his salary.

His monthly re-payments take up most of the family's income and he has been threatened with re-possession.

http://news.bbc.co.uk/2/hi/programmes/f ... 010415.stm

This kind of practise, which IMO is endemic in Ireland and the U.K. is a time bomb for the banking sector, not to mention the huge human cost of high levels of repossessions.

[jam_mac_jam]

The favourite one here in Ireland is to use the credit union to borrow the deposit as they don’t show up on the credit checks, this is completely widespread in the past few years.

[TradCat]

jam_mac_jam

I did that to buy my first house in 1991. I wouldn't have got the loan without it and the house cost £28,000.

[corkman2007]

jam_mac_jam

I did that to buy my first house in 1991. I wouldn't have got the loan without it and the house cost £28,000.

I'll give you 50k for it - cash.

[ballot stuffer]

I know it was a a regular occurance to get HR departments to print out payslips overstating the persons income.

[jam_mac_jam]

I know it was a a regular occurance to get HR departments to print out payslips overstating the persons income.

and fake letters from parents saying that they were gifting you the money when in fact you are borrowing it from somewhere else.

[eddiebatt]

I got a sub prime mortgage in London just over 3 years ago despite the fact that I had moved back to Ireland 2 years previously.My financial advisor charged me a monkey (500stg) to provide me with a set of books from a chartered accountant.
As regards the whole subprime market I would say I am well able to look after myself but these guys really are the scum of the earth.A bounced direct debit costs around 50stg and some of the letters they send out can be completely over the top-I can imagine the reaction they would have on a vulnerable person.
My advice to anyone thinking about dealing with these people is don't do it unless you have the certain knowledge that the property you are buying is substantially undervalued.