exaggerating your income to get a mortgage

I'd have thought lying about your income to obtain a mortgage that the

It is - but what if the deception relates to the applicant's name - or to some other question on the mortage application form? In many cases lies are told to gain loans - a businessman will bump up the profits without dislosing the liabilities - an unmarried mother will claim to have no dependents etc - many people create a rosy picture by distorting or concealing the truth.

At what point should such activity fall from the civil liability arena into the criminal arena ?

Yours faithfully,

John Aidiniantz

Ask Peter Mandelson. :)

"half_pint" wrote

But it won't be any worse later on, than at the start of the mortgage - if someone can afford a certain proportion of pay at the start of the mortgage, they should be able to afford the same proportion later - shouldn't they? [Unemployment notwithstanding...]

"half_pint" wrote

If the worst does happen, and the borrower loses their job - then presumably

So, does the possibility of unemployment really suggest that multiples should remain low at 3-3.5x ? Rather than looking at the proportion of income being spent on mortgage payments, which might show that 5x is perfectly affordable at current low interest rates (with interest able to be fixed for a long time, eg 10 years)?

Most lenders do not charge a MIG up to 90%. Most self cert Mortgages are max

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

It what point it *should* slip from civil to criminal is up for general discussion. At what point it *does* slip, OTOH is perilously quickly!

When the deception becomes material to the decision as to whether to offer the facility or not

Brian

Of course but "back in the 80's" the general idea you took on a big a M as you could afford (or slightly more than u could afford) , knowing that after 2-3 years you could be earning say 33% more. If the initial mortgage was say 50% of you income it would only be

It doesnt matter, the lender never loses out, you cannot run off with the house in the boot of your car and flee the country

Self certification has i am sure, some far reaching effects.

I wonder if any of these over the top wage figures, are used elsewhere, by Gov.t Dept's when say, working out average wage in the UK, for example. (Nasty Business).

In short yes.

Of course there is a difference between average and median wage. A small proportion of the population earn enormous wages which makes the average artificially high, with most people earning well below the average.

I believe the median male wage in 2002 was 407 gross per week!,000PA. X

Also many people don't need a 100% mortgage and may have savings

You might be interested to know the argument from the financial industry's PoV. They argue that it is not the point whether the loan be repaid. The lender has taken on debt that is of a lower grade than would otherwise be the case. This makes the lender's accounts false. It makes the market's appraisal of the lender's loan book false. It makes the markets see the lender's own credit rating as being higher than it should be. This makes other financial institutions place too high a value on the lender's business and in turn may cause them to on-lend funds at too low a rate to truly reflect the risk involved. And of course investor confidence is invariably damaged when such fraud is eventually uncovered - if such be the case. If this kind of thing became widespread, it could conceivably cause serious damage to the banking sector.

"half_pint" wrote

So, on average earnings and using a 90%, 3.5x mortgage, someone can afford to buy a house priced at ** 94,290 ** (using your figures above). And that doesn't even require lying about income on a self-cert....

"half_pint" wrote

... with much lower interest rates on the "burden" ...

"half_pint" wrote

Promotional salary increases? Saving in advance to "move up"??

"half_pint" wrote

Eh? A 3.5x, 90% mortgage with income of 10,000 allows a house price of

"Paul Burridge" wrote

But the lender has no risk!

If the borrower re-pays, no problem. If the borrower defaults, the lender claims on the MIG - no problem!

Hence, how can there be any reduction in the risk on the loan??

I believe that falsified CVs have been used in criminal charges - obviously the latest one of note being that of the undercover BBC reporter in the police force. Also another case which I read about involving a school hedmistress being arrested at 6am at home for 'false qualifications' and such like... one would think that her ability to do her job should be a deciding factor in whether to keep her on, not criminal prosecution. After all who does not tart up their CV in one manner or another?

Axel

of course they do, but not anywhere within 100 miles of me for starters, or do you suggest a daily 200+ miles commute is without cost and a viable plan?

It's a valid point. I've seen advice given before where job applicants are encouraged to 'taylor' their CVs to the particular job they're applying for. There is a problem with that, these days, however. Increasingly, companies send applicants' CVs to Equifax who then search their vast database for any previous CV submissions by that person. If such a record exists, the CVs are compared to ensure they're the same. Nasty for anyone who's followed the 'tayloring' advice! It seems would-be employees face an increasingly tough time of it with all the checks and tests they can expect to encounter. Will it all end in the creation of an unemployable underclass? Time will tell...