UK Landlord Forum / Life

Citizens Advice has accused UK sub-prime lenders of knowingly giving mortgages to many poor borrowers who cannot afford them.

Reported by the BBC: http://news.bbc.co.uk/1/hi/business/7138786.stm

Yeah, i'm not entirely sure I'm going to agree with that. Of course, lenders do need to tighten up....BUT...

Is it any different than a sweetshop selling lots of chocolate to overweight kids? Hmmm...

Somewhere along the line, the consumer needs to take responsibility.

Lenders odv want to make the most money they can ... so they offer a wide range of deals etc ... to make the most money .
They arent there to look into if you can keep up the re-payments .. thats upto you .. and you are the one that suffers if you cant meet them .
The lender will always get there money no matter what .

Taking on any kind of mortgage or loan is a big thing ... and  your lender or advisor tells you that ... so I do think if you cant afford one ... you simply dont get one until you can .

The figure about 70% of repossession hearings are people with bad credit .... is quite bad though .
So I do think it is a 50/50 responsibility .
But I really dont think lenders are to blame .

The lenders can resolve the problem, but why should they? They're not doing anything illegal. If consumers are too naive to realise thay can't afford payments, that's their fault.

I don't think it's rocket science. You know if you can or can't afford monthly payments. I know I can't afford a 700k mortgage, so i wouldn't get one.

I think consumers should take 90% (if not more) of the blame

Hard one this,
My sweet shop owner sold me loads ah shit,
No body judges for the future and the uncetainty it brings,  But as i have said before, people will follow what ever the lender says,
People hate money and everything that goes with it, how many times have you sat in an office or  on your sofa and switched of to someone who is talking about something you aint interested or can not get to grips with.
I switch off every time listerning to money people talking money to me, AND THEY KNOW WE DO,  That is there biggest selling tool, knowing that the average Jo/Joe knows nothing about what they are talking about and they sell you anything,  If they say you can afford a mortgage then you will go with them,  it happens time and time again, information overload, it works in many ways.
I say both are to blame

Lender for getting the most they can by bammmbooosiling you with stats
Consumer, for mot doing there home work

Quote from: Badger on December 12, 2007, 02:17:34 PM
Hard one this,
My sweet shop owner sold me loads ah shit,
No body judges for the future and the uncetainty it brings,  But as i have said before, people will follow what ever the lender says,
People hate money and everything that goes with it, how many times have you sat in an office or  on your sofa and switched of to someone who is talking about something you aint interested or can not get to grips with.
I switch off every time listerning to money people talking money to me, AND THEY KNOW WE DO,  That is there biggest selling tool, knowing that the average Jo/Joe knows nothing about what they are talking about and they sell you anything,  If they say you can afford a mortgage then you will go with them,  it happens time and time again, information overload, it works in many ways.
I say both are to blame

Lender for getting the most they can by bammmbooosiling you with stats
Consumer, for mot doing there home work

But having no interest in "money" is no excuse. A builder probably doesn't like learning all the theory behind the safety procedures with in the trade, but the builder needs to know and follow the procedures in order to have a safe and successful build, right?

If a consumer switches off during the important phases, then that's the consumers fault.

Thats why blame lays at there feet also, homework , i always say that, and so does V, where is she any way

She's been away for a few days now. She's going through one of her phases again =/

Did you send her one of your dirty messages and scare her away?

Na she sent me one of hers and scared me away lol

I think its just a fact that if you want a mortgage you have to listen and read all the terms .
If you dont ... well your just stupid .
Its so important that I dont think its just a .... 'Oh I dont like listening to boring information ' .

Quote from: Badger on December 12, 2007, 02:25:26 PM
Na she sent me one of hers and scared me away lol

Did she talk about my 3rd nipple? lol

Quote from: Fionalouisa on December 12, 2007, 02:25:47 PM
I think its just a fact that if you want a mortgage you have to listen and read all the terms .
If you dont ... well your just stupid .
Its so important that I dont think its just a .... 'Oh I dont like listening to boring information ' .

Yeah, we're on the same wavelength, Fifi69.
^5

  Stop it already !

Yes and your award winning bits.

Ok research etc is the key, but there are still 70% of *stupid people * out there who dont or who didnt

Exactly so its the consumers fault at the end of the day !

Yes for not listerning or switching off or not research, Bu But but, Do you not think its a sneaky tactic from the lender to sell to you knowing that 70% of people ish do this !

haha no .... because they have to tell you all the info ... or else the thicky people would turn around when its all gone pear shaped and say it not there fault because they actually wanted to know all the legal information .

How is that sneaky?

The consumers apply for the mortgage themselves. It's not like a mortgage broker approaches someone stupid and pretends to sell them windows, but is actually selling them a mortgage.

The consumer goes to a broker for a mortgage- nothing sneaky about it.

That's like saying teachers are sneaky for trying to teach a student science even though they're in a science class.

Ok, i dont think i am getting out there what i am trying to say.
All business is conducted a way that suits it and what works for it, Business has been around for ever and has become what it is today through 1000s of years of tried and tested methods.
Are you tring to tell me that a broker does not use sneaky practices * not all the time* to sell a package.  Cause he does, as soon as you walk through the door they have clocked you and as soon as you start to answer there predetermined questions they have a profile on you as well.  They know how to work you and if you are thick then you make their jobs alot easier.
Ok the windows thing,  Who is also to say, that a Broker would sell you a product knowing its not the one you really wanted but it will do and it makes his figures look better by selling it to you.

I think IF you know what you want .. and you should know what you want .
The broker deliveries on what you want and gets you the supposed best deal .

I think if you go in not knowing what you want or anthing about mortgages etc .. then it really is your own fault for replying of the advisor and taking his word for something so important .


Anyways Im abit lost now haha  so i'll stop .

Yeah, all i'm saying is that a consumer goes to a broker for a mortgage, so they know what they're going to get at the end of the day. It's not always upto a broker to sell them the best mortgage, they're just their to sell a mortgage.

If a consumer picks a shitty mortgage because they don't really understand mortgages, surely it's the consumers fault? Like you said, they should do their research.

But I personally believe people get mortgages without initially being able to afford one, as opposed to a broker selling a bad mortgage.

The way I see it, the individual is responsible for ensuring they do not overcommit themselves.

That said, the individual is often - as we have seen - not adequately informed to make the choice, which is worrying. Perhaps one solution to that might be to educate people in a useful subject like financial management at school alongside qualifications that will lead to the employment treadmill. Its unlikely this would happen, because it would result in less suckers to profit from.

And, most significantly in terms of lender liability, lenders perform these checks on you when you apply for a mortgage under the guise of "determining whether you can afford it, in order to protect you" when really they're "determining whether its in their interests to lend to you, in order to profit". Given our previous observations on people not understanding interest rates, its highly likely that many people will take the bank's "appraisal" at face value, and consider it a safe investment purely because the bank has "told them they can afford it".

So no, its not the bank's responsibility, but its also a question of whether we want to live in a society that protects the stupid, irresponsible or misinformed from themselves.


V

Quote from: Fionalouisa on December 12, 2007, 02:56:20 PM
I think if you go in not knowing what you want or anthing about mortgages etc .. then it really is your own fault for replying of the advisor and taking his word for something so important .

Perhaps true, but with the case of professions there is also the argument that people employ an advisor (and often these guys do make a commission) precisely because they don't have the knowledge themselves. The issue is finding a trustworthy one, but with people moving around so much its not always possible to rely on your network of friends to make a recommendation.

Its the consumer's responsibility to ensure they can afford something they sign up for, but at the same time sharp practice is unreasonable; it is not a genuine victim's fault that they are made a victim of someone else's deceit for profit. The complexity comes from trying to determine whether a particular consumer has been unfairly treated. We regulate financial services for a reason; people need expert input, and rely on it for critical life decisions. If someone went in for a private bypass operation and it turned out the risks were very different to what they had been lead to believe, would it be the patient's fault for not having ten years medical training under the belt in order to be able to make the choice, or the consultant's fault for not having correctly informed them.

That's the nature of profession; you are an expert, you have a responsibility, and you are - in part - liable should you fail to execute that responsibility. This is why professions pay ... but genuine swindlers want the rewards of being a "financial professional" without the responsibility.


V

If you employ an advisor, that's a different issue. Then definately he/she should take a lump of the responsbility if they set you up with an unsuitable mortgage.

But most mortgage brokers aren't employed by the borrower, but by the lender.

Quote from: propertyfag on December 19, 2007, 01:57:25 PM
If you employ an advisor, that's a different issue. Then definately he/she should take a lump of the responsbility if they set you up with an unsuitable mortgage.

But most mortgage brokers aren't employed by the borrower, but by the lender.

Absolutely true. But if they portray themselves to be acting in the interests of the borrower, then they are being deceptive.

My mortgage advisor, who worked for my bank, did the exact same thing. Of course I took away all the paper work and decided for myself on the best deal, but she spent a lot of time quizzing me on all my financial details "to determine what I could afford", when really it was all about determining what they were prepared to lend in terms of risk. I'm fairly confident she'd have increased my outgoings further given half a chance, with all the extra products she wanted me to take and a different structure of mortgage that would ultimately have cost more. All this was presented as advice to me and recommendations in my interest.

And while I walked away secure in the knowledge I had acted on my own counsel, it is not entirely ethical for her to have put her suggestions across in that context.


V

Yeah, I see what you're saying.

But you did your research and you had an understanding of what she was actually trying to do. And because you didn't employ her, she was probably just trying to earn as much money as she could. Hell, she's a sales person, I don't blame her.

I can see how easy it is for people to get caught in the trap, but it's just as easy to prepare yourself, as you did...

Yes, it was relatively easy for me. I have the benefit of having watched my family buy and sell houses while I was growing up (the ones we lived in, no crazy investor stuff unfortunately!!), of being equipped with a good education having had lots of opportunities, with having friends who had bought houses or were informed on the issues.

Don't get me wrong, I have absolutely no sympathy for the genuinely inane who refuse to take responsibility for themselves, but there are some people who just have not had the opportunity to develop the necessary understanding to comprehend the committment they're taking on, or who perhaps don't have the analytic acumen or intelligence to think their way through what's really going on. Perhaps if they don't, they shouldn't be buying a house, but who's going to tell them that; who can blame them for wanting what they see everyone else having, or doing what everyone else is doing (what is rammed down their throats in programmes like the property ladder, for example).

You're into the area of ethics that deals with limiting people's life choices based on an assessment of them by some other individual who is considered to have superior judgement ... which is interesting territory. Its reassuring to convince ourselves that victims are responsible for their predicament; it implies a level of control over the uncertainties of life that would make it far more comfortable, but which does not really exist.


V