The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

We took a 10% pay cut in Jan, another one looms, house price falling all the time......I'm from Westmeath! Nothing to look forward to!

Move to Mayo. Despite every indicator always pointing to a bad year, we are always optimistic. We never, ever, learn.

[Billys Boots]

Move to Mayo.

Things haven't got that bad yet, have they?

[the Deel Rover]

I wonder were the mortgages stress tested 

Thursday, March 12, 2009

Builders engage in fraud to sell houses
by Cormac O'Keeffe

CASH-strapped builders are hiring fraudsters to buy their unwanted properties at inflated prices, according to the Criminal Assets Bureau.

Head of the CAB, Chief Supt John O'Mahony, said the crime, known as "builder bailout fraud" has surfaced in recent months and is driven by the downturn in the economy.

"A builder has a property he can't get rid of. He hires a fraudster. He creates a false identity to buy the property. The builder has his money and the fraudster has his."

He told the Oireachtas Finance Committee yesterday the properties were typically sold for an "inflated sum".

Chief Supt O'Mahony said there were "a number of active investigations", but declined to say how many or the types of builders involved. He said this type of fraud was very common in the US. It works as follows:

The fraudster creates false documents by scanning in real documents into a computer and making amendments. He uses the Irish Payment Services Organisation website to obtain someone's bank account details.

He works with a mortgage broker who puts together the application using the false documents.

The financial institution approves the mortgage and transfers the funds to the fraudster via a solicitor.

The builder receives the payment for the house from the fraudster and pays the fraudster his fee.

When the mortgage repayments are not met, the bank is left with a false identity. Chief Supt O'Mahony said CAB's main interest was recovering the properties. He said if there was evidence of criminality, those involved would be dealt with through the courts "no matter who they are".

He said mortgage fraud was the "most prevalent" type they encountered. Of the 56 cases they took in the High Court in the last three years, 20 dealt with properties. Many involved multiple mortgages.

Chief Supt O'Mahony said false documentation was used in all cases. He said criminal gangs were using mortgage fraud to launder their money. They typically used a mortgage broker who either "coaches" them or provides false documents.

He said the documents were "very sophisticated". The committee was shown examples, including bank statements, wage slips and utility bills.

He said another method involved the abuse of "solicitors' undertakings", whereby a financial institution grants a mortgage after a solicitor undertakes to carry out all the necessary paperwork, such as registering the property, which isn't done.

The criminal repays in cash and often takes out a second mortgage once he has paid the first one.

Greg Connell of the Irish Fraud Bureau said new anti-money laundering legislation would result in greater use of false documents of even higher quality. He said criminals would start stealing the identities of "prosperous and successful" people, as well as dead people with good credit histories.

The financial institutions which had loaned hundreds of millions of euro to high-profile disgraced solicitors could have applied greater scrutiny beforehand, if they had examined credit judgments made against them, said Mr Connell.

[Rossfan]

.....I'm from Westmeath! Nothing to look forward to!

All you have to do is stroll to the River Shannon and have a look at the wonderful place to the West of you.
The sight of such a divine place will cheer you up no end.

[Croí na hÉireann]

.....I'm from Westmeath! Nothing to look forward to!

All you have to do is stroll to the River Shannon and have a look at the wonderful place to the West of you.
The sight of such a divine place will cheer you up no end.

That only applies to Athlone... 

[FermGael]

http://news.bbc.co.uk/1/hi/business/7948791.stm

Interesting.  If this becomes law, this has massive consequences in the UK

[Bogball XV]

http://news.bbc.co.uk/1/hi/business/7948791.stm

Interesting.  If this becomes law, this has massive consequences in the UK

Heard a mortgage broker on breakfast tv this morning giving out holy stink about this, he was trying to say that the banks had lending under control at all times and that affordability measures were the correct way to decide on the size of mortgages to be advanced. 
It would be a brave decision by Brown to introduce strict regulation on mortgage lending based on salary multiples, will he do it?  I think not as the political backlash would be too severe (I don't think the markets would take kindly to it either).

[thebigfella]

http://news.bbc.co.uk/1/hi/business/7948791.stm

Interesting.  If this becomes law, this has massive consequences in the UK

Quite - I predicted though they will over regulate the banks and with that will require new regulatory systems/processes. Looking good work wise for me then for the next few years   

[armaghniac]

he was trying to say that the banks had lending under control at all times

Yeah. Right.

Mortgages should be restricted to 80% of value. If this had been done in Ireland we wouldn't be in the mess we are in.

[Rossfan]

Plus of course if the Government hadnt been adding fuel to the House price inflation fire by throwing tax reliefs after tax reliefs for any sort of building.

[ludermor]

Do you think by keep repeating that you will get a reaction? you have made your point hundreds of times!

[Rossfan]

It's true isnt it?

[ludermor]

Aye RM it is but do all your posts have to state it?

[bcarrier]

The ideas campaign is a brillant idea .

[heganboy]

hows that bailout going for everybody today?