Earnings were 'deliberately inflated' to secure loan

 

AN ACCOUNTANT “deliberately inflated” a mortgage applicant’s earnings to ensure her loan application would be successful, the High Court has heard.

Counsel for Nua Mortgages told the weekly chancery summonses hearing yesterday that the defendant had said in an affidavit her accountant had exaggerated her earnings to ensure her mortgage application was successful.

The court heard how the defendant did not read or check the veracity of contents before signing for the mortgage and only discovered the inaccuracies when Nua Mortgages sent her a copy of her file in March 2011.

Her annual earnings were set out to be €51,000 in the mortgage application, but in reality her earnings were €8,474. Her company earnings were also inflated by the accountant, who was “well aware” of the true earnings, having prepared the company accounts the previous year, the court was told. The earnings of the company, a hairdressing business, were said to be €55,241, but were actually €23,635.

The defendant was now 33 months in arrears, owing arrears of €53,000. The case was one of 81 adjourned by Ms Justice Elizabeth Dunne.

The challenges were taken by New Beginnings, a group of lawyers and business people who have been working without fee for homeowners in the process of losing their property.

They involved mortgage lenders including Secured Property Loans Ltd, EBS Building Society and GE Capital Woodchester Home Loans Ltd as well as Start Mortgages.

The issues raised included whether or not lenders were entitled to summary possession orders claimed under section 62.7 of the Registration of Title Act 1964 given that the Act had been repealed by section 8 of the Land and Conveyancing Law Reform Act 2009.

Some 36 of the 83 cases lists before yesterday’s court sitting were being taken by subprime lender Start Mortgages. Just two of the orders lists resulted in a court order being granted.

In a case taken by Start, the court heard how the defendants had applied for a €420,000 mortgage. They were granted a mortgage of €395,101 which they drew down in June 2007. However, arrears began accruing just over a year later and now stood at more than €64,000.

Counsel for Start Mortgages told the court the defendants had obtained legal advice and were anxious to surrender their property in Tinneranny, Co Kilkenny, to the extent that they had written to the lender saying they are not in a position to deal with the matter further, and enclosing the keys to the property. The court heard no tenants were in the property as it is in a bad state of repair.

Judge Elizabeth Dunne granted an order for possession on the property with a stay of one month.

A second possession order was granted to GE Capital Woodchester for a property in Dundalk, Co Louth. The court heard that the defendants had consented to an order. A stay of six months was granted.