Mis-Selling of Mortgages

During the boom of the Celtic Tiger property purchases in Ireland soared to an all time high. Investors, first time buyers and those looking for reliable pension funds all dabbled in the housing market. The property market had a proven track record over the last decade or so and it was common knowledge to think that putting your money into "bricks and mortar" was a no brainer that couldn't lose. You can see the logic in this style of thinking as house prices seemed like they would never stop rising and it was not uncommon to hear of investors making returns of between €50,000 to €200,000 in as little as 12 months on single property purchases. Mortgages were easy to come by and in some cases you could get 100% mortgages with no down payment. It really seemed to be a win win for everybody involved until the Stock Market Crash 2008.

As a result of this crash property prices plummeted and those that had recently entered this almost magical world of property investing soon found themselves in negative equity, mortgaged up to the hilt and tied to property that you could not sell for love nor money. This was when a lot of anxious and worried consumers started to look closely at the mortgage contracts they had entered into and that is when signs of mis-selling became apparent. The mortgages that some lenders were offering were not as great as we all thought.
The problem with Mortgages was that during the boom they were sold at an incredibly fast rate and often without any proper compliance and screening. Banks and lending institutions became like conveyer like machines churning in applications and spitting out credit. Profits soared and all involved in the lending industry seemed completely content on the pigs back. They were more than happy approving Mortgages for anybody with a decent salary and for those that did not meet the income threshold they handed out sub prime mortgages. That's right if you could not afford a regular mortgage they gave you a sub prime mortgage with higher interest rates!! That is a system which was inevitably doomed from the beginning. Profit came before practicality. Thought was not given to what could happen if prices fell and jobs were lost. This soon however became a harsh reality and that is when the frightening levels of mis-selling became blatantly apparent within the Irish Mortgage Market

Mortgages should be issued after a number of key areas are visited. They are Suitability, Affordability, Loan to Value, Fact Finds & the Clients needs. Only when each of these areas is investigated can a Mortgage be administered correctly. If they have not been followed you could have grounds to make a compensation claim for mis-selling.