Irish Mortgage Corp. "a deal with the devil".

Belly_Dancer

INVESTIGATORS from the Central Bank have started to interview distressed mortgage holders as part of a probe into the sales practices used by mortgage brokers during the boom.
In an unprecedented move, officials from the bank’s enforcement section are calling to the homes of those in arrears to take detailed statements on how loans were secured.

These could be used in any court action or inquiry against the mortgage seller.

Documents seen by the Irish Examiner show that, as part of the probe, the Central Bank has examined mortgage and loan forms drawn up by the Irish Mortgage Corporation (IMC).

They state: "The Central Bank of Ireland regulates IMC as a mortgage intermediary and is currently looking at the sales process used by IMC in relation to the sale of mortgages to clients of IMC."

One IMC client, who has given a detailed statement to the Central Bank investigators, said she had signed a "deal with the devil" and was approved for a €300,000 loan with her husband despite the fact that both were on social welfare.
She said the couple should never have been approved for the remortgage of their Dublin home by IMC as her husband only operated a fruit and veg stall.

Her husband took his own life last year and his widow has told the Central Bank investigators that the pressure over trying to repay the loan was a "major contribution towards his death".

The widow has agreed to participate in any inquiry or court proceedings.

Fine Gael TD Paschal Donohoe met the widow and her family yesterday and said they were the victims of bad lending decisions and a lack of regulation.
"I’ve met this family and seen the tragic consequences of bad banking," said Mr Donohoe.

"They have been broken apart by terrible lending decisions and lack of regulation.
"It’s the single saddest case I’ve ever come across and makes me determined more than ever that we put in place a framework that will stop this happening to other homes and families."

A Government-commissioned report examining relief measures for troubled borrowers will be discussed by Cabinet ministers today and is expected to be published in the near future.

In a statement, IMC managing director Derek Maguire confirmed that Central Bank officials had visited IMC offices and that the company had "dealt with all queries raised".

He said the company could not answer other questions because of data protection laws, but added: "All complaints raised by consumers are handled in accordance with the Central Bank’s consumer protection code and IMC is fully compliant in this regard."

The Central Bank declined to comment on the actions of its enforcement section.

New Beginning, a support group for families fighting the repossession of their home, said it was aware of other cases where borrowers with financial troubles had been given excessive loans.

Co-founder David Hall said: "It is unacceptable that families are living in fear from lending institutions."


Read more: http://www.irishexaminer.com/ireland/deal-with-the-devil-170308.html#ixzz1aQTf69jj

noxqs

Why did they take on a 300,000 euro mortgage on social welfare? Never mind they got approved for it. But what did they think was going to happen?

Nate--IRL--

noxqs wrote: »

Why did they take on a 300,000 euro mortgage on social welfare? Never mind they got approved for it. But what did they think was going to happen?

They didn't care, they got their fees and sold the loan on.

Nate

noxqs

Not them. The borrowers.

Guy:Incognito

Nate--IRL-- wrote: »

They didn't care, they got their fees and sold the loan on.

Nate

The people that took out the loan.

starbelgrade

noxqs wrote: »

Why did they take on a 300,000 euro mortgage on social welfare? Never mind they got approved for it. But what did they think was going to happen?

They probably thought they'd be able to keep up the payments.

Stupid, yes. But it was equally as stupid for the bank to to loan them the money.

There's moral hazard & there is bad banking. Both were at play here as they were for many people during the last few years of the boom.

It's not an easy problem to solve, but there's a huge societal cost as well as the huge financial cost from what happened over the last 7 or 8 years and it can't be fixed by simply placing all the burden on one of the parties who were responsible.

It's not that easy.

Belly_Dancer

quite possibly they had other debts, eg credit cards, store cards, car loan, personal loans etc. which the nice chappie from IMC kindly offered to consolidate into 1 large remortgage spread over 25, 30 or 35 years.:rolleyes:

depending how the figures are "presented" this can appear like a good idea to someone who is not adept at financial planning.

theteal

i'm getting really annoyed with the word 'boom', its pronounced b.u.b.b.l.e. . .now repeat after me. . .

Nate--IRL--

noxqs wrote: »

Not them. The borrowers.

Guy:Incognito wrote: »

The people that took out the loan.

Ahh, sorry, must read posts a bit more carefully in future.

Nate

Hal Emmerich

Belly_Dancer wrote: »

These could be used in any court action or inquiry against the mortgage seller.

Documents seen by the Irish Examiner show that, as part of the probe, the Central Bank has examined mortgage and loan forms drawn up by the Irish Mortgage Corporation (IMC).

"Any Court action":rolleyes:

And why just the IMC, the whole lot of them were at it.

Page filler article.

admiralofthefleet

Nate--IRL-- wrote: »

They didn't care, they got their fees and sold the loan on.

Nate

mike

Hal Emmerich

theteal wrote: »

i'm getting really annoyed with the word 'boom', its pronounced b.u.b.b.l.e. . .now repeat after me. . .

buble

https://www.youtube.com/watch?v=SPUJIbXN0WY

noxqs

I'm sorry but my calculator doesn't agree.

No matter how you dice and slice the numbers there is no way - what so ever - the interest on a 300,000 euro loan can be repaid on social welfare. Not even close.

Interest - repayments:

1% - 964 euro per month
2% - 1,106
3% - 1,258
4% - 1,419
5% - 1,590

Now how much is social welfare x 2 plus any other government handout substracted from that plus food, clothing, heating, other expenses ?

Impossible.

I'm sorry but ignorance is a poor defense as well. Sub prime lending should be criminal but I honestly can not wrap my mind around them signing such a mortgage and expecting my sympathy.

Especially as they basically asked the tax payers to hand them a 300,000 euro house for free. My sympathy ended way before that. People on Social welfare should not get a mortgage end of story - it doesn't even begin to make sense.

Social welfare is to support people out of jobs not to pay their jumbo mortgages. I almost had a nosebleed trying to figure out the 'WTF' in this case.

Guy:Incognito

Belly_Dancer wrote: »

quite possibly they had other debts, eg credit cards, store cards, car loan, personal loans etc. which the nice chappie from IMC kindly offered to consolidate into 1 large remortgage spread over 25, 30 or 35 years.:rolleyes:

depending how the figures are "presented" this can appear like a good idea to someone who is not adept at financial planning.

Also quite possible they lied to the broker off their own bat and got a mucher bigger loan than they should have.

I know people in a former job that were getting P60's done by the woman that did the accounts to say whatever they wanted them too to get their mortgages.

End of the day, you borrowed , it's your responsibility to pay.

Einhard

noxqs wrote: »

I'm sorry but my calculator doesn't agree.

No matter how you dice and slice the numbers there is no way - what so ever - the interest on a 300,000 euro loan can be repaid on social welfare. Not even close.

Interest - repayments:

1% - 964 euro per month
2% - 1,106
3% - 1,258
4% - 1,419
5% - 1,590

Now how much is social welfare x 2 plus any other government handout substracted from that plus food, clothing, heating, other expenses ?

Impossible.

I'm sorry but ignorance is a poor defense as well. Sub prime lending should be criminal but I honestly can not wrap my mind around them signing such a mortgage and expecting my sympathy.

I don't think anyone is saying that they should bear responsibility, but rather that it should be spread between irresonsible borrower and irresponsible lender.

Belly_Dancer

let's not forget the brokers, Irish Mortgage Corporation get paid a nice commission fee which is usually a percentage of the loan drawn-down.

they would quite likely have encouraged their victims, 'er i mean clients to take out a pension or endowment plan, again earning an attractive commission for them in the process.

Mortgage brokers like IMC are commission driven.

the more the client borrows, the more they earn. SIMPLES:D

Guy:Incognito

Belly_Dancer wrote: »

let's not forget the brokers, Irish Mortgage Corporation get paid a nice commission fee which is usually a percentage of the loan drawn-down.

they would quite likely have encouraged their victims, 'er i mean clients to take out a pension or endowment plan, again earning an attractive commission for them in the process.

Mortgage brokers like IMC are commission driven.

the more the client borrows, the more they earn. SIMPLES:D

So pretty much the same as any sales job then :rolleyes: No one is forced to sign anything, just like the guy in the electrical shop doesnt force anyone to buy a 50" tv and the car dealer doesnt hold a gun to their heads.

Eoin

My wife and I used them, and they had gotten us approval for a mortgage that was about 110K over what we were comfortable with. If we had drawn down a mortgage that size, we would have been in serious trouble when the interest rates kept going up a few years ago.

I wouldn't have blamed them though, you'd be thick not to think that it's in a broker's best interests (with shag all risk to themselves) to push for the biggest mortgage.

I feel for couples who would never have thought that one or both of them might be out of a job for ages/ have to take extended pay cuts or whatever, but people who didn't stress test interest rates, or allow themselves any breathing space every month can't entirely blame the banks or brokers.

noxqs

And where is the financial regulator in this? Where is the laws against sub-prime lending and where is the Gardai? And who is the people who bought these loans - I'm sure its the usual bailed out suspects.

And sure - no matter what happens in this case, the tax payer looses anyways. So better them off the hook on this one.

But geez where WAS or IS (?) the financial regulation. Is it just a tag that financial commercials get to slap on at the end for laughs ? "regulated by the Irish financial regulator"..

This is giving me a migraine to think about - so much 'WTF'.

Belly_Dancer

Guy:Incognito wrote: »

So pretty much the same as any sales job then :rolleyes: No one is forced to sign anything, just like the guy in the electrical shop doesnt force anyone to buy a 50" tv and the car dealer doesnt hold a gun to their heads.

i agree everybody must accept responsibility for their actions, just like when a guy decides to drive home after a dozen pints. but souldn't the barman (or broker in this case) also accept some responsibility?

After all they are supposed to be the professionals?????

noxqs

Poor analogy.

Unless a guy jingles the key in front of the barman, looks him straight in the eye and says 'sure I had ten pints but I'm driving home' - I don't see how the barman has any responsibility.

People need to take some personal responsibility. We can't - as a state - community - people - expect to watch everyone like a hawk and interfere in their decisions all the time. And if we did do that, however, people wouldn't accept that either.

Eoin

noxqs wrote: »

And where is the financial regulator in this? Where is the laws against sub-prime lending and where is the Gardai? And who is the people who bought these loans - I'm sure its the usual bailed out suspects.

I'm not sure they were involved with subprime lending - interest rates were as competitive as any others on the market.

Belly_Dancer

noxqs wrote: »

Poor analogy.

Unless a guy jingles the key in front of the barman, looks him straight in the eye and says 'sure I had ten pints but I'm driving home' - I don't see how the barman has any responsibility.

People need to take some personal responsibility. We can't - as a state - community - people - expect to watch everyone like a hawk and interfere in their decisions all the time. And if we did do that, however, people wouldn't accept that either.

exactly my point. these brokers were in a position to know far better (than the barman) what circumstances these folk were in.
by law they have to do what's known as a factfind, ie a detailed report as to the financial circumstances of their clients.

noxqs

Why would a financial regulator not involve themselves in .. regulating .. lending criteria? Is that not one of the key reasons financial regulation exists in the first place?

Interest rates doesn't mean anything in the short term, low or not. They always fluctuate and they always return to a good few percent higher than they were - that should have been clear to anyone who had - presumably - studied economics and went for a job at the regulator/central bank.

So what did they do ? Or what do they do, if not regulate. Honest question.

Regulation of interest rates is for central banks and open market bond auctions. The regulator can't set an interest rate. They can however, regulate the banks business practices. Or so I thought.

(Ah I get what you meant wrt to interest rate, I didn't mean the APR on the loan however - I meant the criteria and enforcement of same)

Belly_Dancer

noxqs wrote: »

Why would a financial regulator not involve themselves in .. regulating .. lending criteria? Is that not one of the key reasons financial regulation exists in the first place?

Interest rates doesn't mean anything in the short term, low or not. They always fluctuate and they always return to a good few percent higher than they were - that should have been clear to anyone who had - presumably - studied economics and went for a job at the regulator/central bank.

So what did they do ? Or what do they do, if not regulate. Honest question.

the regulator was asleep at the wheel.
remember the guy who got a massive pension deal 'n payoff.

http://www.herald.ie/news/euro630000-golden-handshake-for-the-bungling-banks-watchdog-pat-neary-1635637.html

Zzzzzzzzz .............

starbelgrade

noxqs wrote: »

So what did they do ? Or what do they do, if not regulate. Honest question.

Very little. The pressure came from the top though - with the government at the time in bed with developers & handing out tax breaks left, right & centre to anyone who wanted them.

Political pressure driven by business & profit was a huge player in the overheating of the property market and Bertie & Cowen were at the helm, surrounded by their developer henchmen.

And now when you see the likes of David Begg - who was one of the heads of the Central Bank at the time - and now proclaims to be a "man of the people", it does really make you think.. why should the ordinary man be the only one who suffers at the end of it all?

It's easy to point the finger in one direction only, especially when it's at an easy target, which so often is the case for those people who are saddled with massive debts for life.

General General

Stench of self righteousness in this thread is disgusting, sure the idiots who got in over their heads are idiots, it's obvious they are... but the guys handing out the money should exhibit the responsibility first and foremost, otherwise, it's like a kid blowing up the school getting all the blame even though his or her teacher gave him the chemicals which weren't even chemicals used for the kind of experiment that any sane teacher would be getting any student to do...

If I lend my one year old child 500 euro, after she signs with an x that she will pay me back 5 euro a week every week for the next three years... then it's me that is the irresponsible pr!ck... or the r3tard... whichever way you want to frame this.

Who doesn't want to believe bullsh!t when it's been fed to them?

This was like thousand dollar whores hitting on 12 year old boys who were on a school trip... to Moscow.

Wertz

noxqs wrote: »

Poor analogy.

Unless a guy jingles the key in front of the barman, looks him straight in the eye and says 'sure I had ten pints but I'm driving home' - I don't see how the barman has any responsibility.

...and yet in some other countries, the barman can indeed be held responsible for someone that has drank too much, caused an accident whilst drink driving or similar.
Part fo the problem with how mortgages are/were doled out (no pun intended) in this country is due to a commission based system and the apparent fact that the lender isn't as concerned about the actual value of the asset they're loaning the money for...

If I was to loan you the money to buy a car, I'd damn well want to know that that car was actually worth the money I was loaing you and wasn't some tarted up lemon, just in case I had to take it off you as part of the debt if your loan went bad...but even more than that I'd want to be sure that you could actually pay me back the price of that car plus the agreed interest.
The thing is that these broekers didn't care because it's not their money they're loaning...they get their % no matter what...and if the sh*t hits the fan the company goes under or gets bailed out.

How the hell was someone reselling fruit and veg and his wife on the scratcher going to pay back a 300K loan???
Takes two to tango here and I have to blame the people who leant it as much as the people who borrowed it.

General General

starbelgrade wrote: »

Very little. The pressure came from the top though - with the government at the time in bed with developers & handing out tax breaks left, right & centre to anyone who wanted them.

Political pressure driven by business & profit was a huge player in the overheating of the property market and Bertie & Cowen were at the helm, surrounded by their developer henchmen.

Exactly... what some of us cannot yet see apparently is that despite all the Celtic Tiger guff about Leadership (for the future, in an international context, blah blah etc blah)... we didn't have Leaders, we had parasitic conmen...

Ireland was conned... & typically enough a large proportion of Irish folk don't want to admit that Ireland was conned. As if, thinking they were isolated from the bullsh!t or thinking they were on the right side of the deal means something now. It doesn't... if you're not sitting pretty, then you got f.u.cked, just like a whole lot of others... after that, it's just a case of working out where on the ladder of f.uc.kedness you are.

mickydoomsux

General General wrote: »

If I lend my one year old child 500 euro, after she signs with an x that she will pay me back 5 euro a week every week for the next three years... then it's me that is the irresponsible pr!ck... or the r3tard... whichever way you want to frame this.

Analogy doesn't work unless you are equating these borrowers as being at the mental level of a year old infant.

Which i guess they probably sort of are judging by their actions.

The lenders were foolish as well but they were engaged in a race to the bottom with their competition so they sort of had an excuse (a terrible one, mind. "We have to be reckless because everyone else is").

Also, for people asking where the regulator was, he was collecting his pay check and keeping his gob shut because it was one of the usual "member of the board of....." type government jobs of which he probably had a few of previously/since. Very few of these guys where put there to do anything other than keep a powerful or influential FF head deep in the pocket of the party. That's how politics works.

General General

mickydoomsux wrote: »

Analogy doesn't work unless you are equating these borrowers as being at the mental level of a year old infant.

Which i guess they probably sort of are judging by their actions.

The lenders were foolish as well but they were engaged in a race to the bottom with their competition so they sort of had an excuse (a terrible one, mind. "We have to be reckless because everyone else is").

Also, for people asking where the regulator was, he was collecting his pay check and keeping his gob shut because it was one of the usual "member of the board of....." type government jobs of which he probably had a few of previously/since. Very few of these guys where put there to do anything other than keep a powerful or influential FF head deep in the pocket of the party. That's how politics works.

I think it was the Christmas (sorry, Winter Holiday) of 2003, when I decided to get my parents a DVD player, to drag them into what I termed (oh, so witty-ly) the latter years of the twentieth century... I got it in Xtravision as I was shtuck in the arse end of nowhere where my parents live (& I unfortunately grew up)... it was a bargain last one of a line jvc with Monsters Inc. free... while looking upon it & hmming & hawing, I heard the fu.c.king guy behind the counter talk about getting approval on a mortgage of blah grand... 150+k... now, I was very wary of that kind of loan & I am fairly accomplished when it comes to numbers... this guy was one of those people who work behind the counter in Xtravision... as Gene Wilder says; y'know... sh!tkickers.

Did I step up & say: you've got to be f.uc.king. joking?

No I did in my f.u.c.k... I got my DVD player for my parents for 49 euro & a free copy of Monsters Inc to give to my sisters kids... 'cause I am a miserable sob.

A lot of sh!tkickers were getting the loans, I tell you.