Property Trader masterminded £3m mortgage fraud
Discussion
Rovinghawk said:
greygoose said:
Indeed, banks are supposed to be the experts in the transaction, if an applicant obviously cannot afford the costs of a loan they should refuse to lend to them.
It could equally be argued that the borrowers know their own position better, & therefore if they can't afford the costs of the loan then they shouldn't borrow.It is up to the professionals to apply their professional knowledge and to assess the situation that is best for both the customer AND the entity for which the professional works.
During the "crazy" years of banking, the professionals assumed that the "correct" stance for the bank was to maximise the profit at the expense of all other business criteria. They justified this more aggressive approach on the assumption that the normal risks associated by relaxed lending had been eliminated by clever programmers and the software systems they had created.
Those risks were still there. Bad loans were still bad loans - and, surprise surprise, they went bad.
Eric Mc said:
Rovinghawk said:
greygoose said:
Indeed, banks are supposed to be the experts in the transaction, if an applicant obviously cannot afford the costs of a loan they should refuse to lend to them.
It could equally be argued that the borrowers know their own position better, & therefore if they can't afford the costs of the loan then they shouldn't borrow.It is up to the professionals to apply their professional knowledge ............
Excellent.
I would just remove the word "all" and replace it with "mainly. On the assumption that the ratio of "idiots" to "non-idiots" never changes, the assumption has to be that it was the banks that changed - because the idiots would have been rejected in earlier times. All the evidence does show that it was the BANKS who changed how they operated - not the "idiots".
Rovinghawk said:
And then the borrowers can stamp their feet, squeal "It's not my fault" like a 5 year-old and try to get compensation for mis-selling rather than mis-buying?
Excellent.
You forgot "Whilst in the back ground the Government and other stakeholders are crying out that the banks are holding back any form of meaningful recovery because they are not lending...Excellent.
Don't get me wrong, I am not great lover of Big Business, but I do get fed up at the 'victim' mentality that people wrap themselves in to devolve any personal responsibility for their actions. Only one party genuinely knew if they could afford £2,500 per month in interest and debt repayments on their take home of £2,900.
Eric Mc said:
I would just remove the word "all" and replace it with "mainly. On the assumption that the ratio of "idiots" to "non-idiots" never changes, the assumption has to be that it was the banks that changed - because the idiots would have been rejected in earlier times. All the evidence does show that it was the BANKS who changed how they operated - not the "idiots".
Whilst I can see you train of thought it is one I don't agree with.It's a bit like saying that part of the railings around this balcony seems to have fallen off. It must be okay for me to walk though the resulting gap then...
The banks could and should have done more to solve the problem but if people acted with a degree of personal responsibility when considering how much they could afford to borrow their error would never have become a major problem.
Eric Mc said:
Why did banks reject stupid loan applications in the past but then started accepting them?
It's not just banks but governments, firms, private individuals .. everyone gets in on the action."Stability is destabilising." http://www.bbc.co.uk/news/magazine-26680993
If the people at the top are effectively sanctioning reckless lending [remember Brown and the FSA .. ] then what other outcome would you expect?
Edited by fido on Tuesday 23 September 16:25
Eric Mc said:
On the assumption that the ratio of "idiots" to "non-idiots" never changes, the assumption has to be that it was the banks that changed - because the idiots would have been rejected in earlier times. All the evidence does show that it was the BANKS who changed how they operated - not the "idiots".
Why assume that?The cat's off duty, the mice will come out to see what's available.
Do you not think that the owner of the balcony might have a duty of care to ensure it is maintained in a safe condition?
And the point I am making is that, once upon a time, the banks were well aware of their "duty of care".
They just decided to abandon it.
And the reason they abandoned it is because they thought they had created magic formulae that rendered them immune from any of the bad effects that might befall them if the "duty of care" was removed.
They were wrong, up to a point. They did suffer bad effects because of their lax approach to lending - but then all us muggins i.e. the taxpayers, rescued them.
So maybe they were right after all.
And the point I am making is that, once upon a time, the banks were well aware of their "duty of care".
They just decided to abandon it.
And the reason they abandoned it is because they thought they had created magic formulae that rendered them immune from any of the bad effects that might befall them if the "duty of care" was removed.
They were wrong, up to a point. They did suffer bad effects because of their lax approach to lending - but then all us muggins i.e. the taxpayers, rescued them.
So maybe they were right after all.
Eric Mc said:
Do you not think that the owner of the balcony might have a duty of care to ensure it is maintained in a safe condition?
And the point I am making is that, once upon a time, the banks were well aware of their "duty of care".
They just decided to abandon it.
http://www.bbc.co.uk/news/business-16126399And the point I am making is that, once upon a time, the banks were well aware of their "duty of care".
They just decided to abandon it.
Come on Eric, even the FSA acknowledges that the FSA didn't do their job properly. Yes, RBS pulled the pin on their grenade and held on to it but the financial regulators didn't stop them - it's their job to supervise. If you seriously think that Fred Goodwin (who ultimately made the decisions) or any one person should be left in sole charge ("duty of care" as you put it) of the financial system then you've got more confidence in mankind than me.
Eric Mc said:
Why did banks reject stupid loan applications in the past but then started accepting them?
Because they changed their criteria. Because it made them more money. Because that is what they do.Why didn't 'idiots' stop to think if they could afford the loans they were applying for. Because they are idiots and being idiots they make poor decisions.
Who is at fault? Some say the banks as it is their job to save people from themselves. Well that is not an argument I agree with. Sure they should not be lending £1m to someone with an income of £12kpa but if someone decides that 4 nights out, Sky and the latest iPhone are more important than paying their dues I have trouble in seeing it as the bank's fault.
In all walks of life we see a continual dumbing down of the importance of personal responsibility. Instead of being required to think for yourself we have to always cater for the LCD and then everyone is dragged down to their level.
I am all for regulation to kerb the excesses of some but when it is a very simple question of "can I afford it" I think that there is only one party who is in overall control and that is the person writing out the cheques.
Rude-boy said:
Because they changed their criteria. Because it made them more money. Because that is what they do.
But, you see, even if they were making more short term profits, they were failing to apply to safeguard their OWN BUSINESS. They were utterly idiotic themselves in that they really, really thought that they had invented a new form of finance that eliminated risk.How stupid was that? And these were SUPPOSED to be clever people. They certainly saw themselves that way and remunerated themselves handsomely - whilst they were selling their own companies down the swannee.
Rude-boy said:
I am all for regulation to kerb the excesses of some but when it is a very simple question of "can I afford it" I think that there is only one party who is in overall control and that is the person writing out the cheques.
And the old style checks that the banks used to insist on were no longer necessary because the banks had convinced themselves that they had magicked away risk. Rovinghawk said:
Eric Mc said:
No - because they KNEW it was their own.
They were under no obligation to lend stupidly. But they did.
The borrowers knew they were wrong. They were under no obligation to lend stupidly. But they did.
They were under no obligation to borrow stupidly. But they did.
And then they blamed everyone else.............
Do you not think that lenders have ANY responsibility to ADVISE as well as sell?
They used to - but they decided that giving advice wasn't lucrative enough.
In the 2000s banking stopped being a profession and became a barrow boy market
toohuge said:
As these mortgages were issued on a fraudulent basis, what happens to the interest / capital gains that would be released from the bank either selling the property or simply collecting interest payments from the owners. Would these profits be considered a proceed of crime?
Legally, of course.In reality, they won't.
I am still waiting for some serious criminal charges to be brought against some of the top echelons of UK banking. I fear I will be waiting a long time.
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