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Mortgage Insurers will not pay out if fraud has been committed.

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Managing fraud in the Mortgage Market
Spotlight Series - Issue 2 Genworth Financial (Mortgage Insurer)

Page 3 - "Furthermore, many within the industry may not realise that Lenders Mortgage Insurers are not licensed to cover losses suffered as a result of a fraud perpetrated by the lender or a third party acting on its behalf in the origination chain. As a result, the lender may seek to recover the losses from those who may be considered to be liable"

I'm sure lenders will not want the fact that fraud has been committed by links in their chains to come out in court otherwise their insurance on the loan WILL NOT BE PAID!!

 EDITOR:  Yes indeedy!!!  Could be the banks never passed on the LMI premiums you paid for and reinsured their own risk.  Now that happened have the Banksters pulled another trick...shareholders should be asking that one!

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  • doyla66
    doyla66 Sunday, 28 October 2012

    Could be the banks never passed on the LMI premiums you paid for and reinsured their own risk?
    Maybe we should ask them?

    If the banks/lenders that have fraud loan cases know their insurers won't pay out, will they try to get the fraud allegation quashed and/or fight harder to avoid compensation?

    What alternative to "fraud" can be used in the loan fraud cases at FOS? We need something stronger than maladministration to imply an intentional criminal activity. Scam loan! :D
    Deceptive and misleading financial conduct? Grand larceny? Embezzlement?
    Is the onus on the borrower to prove intention at the level of FOS in order to get an ab initio determination?

    I've just been thinking about how much we could have achieved with the money that ASIC wasted on Twiggy - $30 million is a ridiculous amount for a court case!
    Who is the receiver of this amount of money, apart from the Court system, external legal counsel, ASIC employees?
    Or even how ASIC could have set up a tribunal for loan cases.
    Or how ASIC could have prepared a report into raising the level of borrower compensation in Loan Fraud cases at FOS.

  • doyla66
    doyla66 Sunday, 28 October 2012

    Our FOS case manager nearly had apoplexy every time we used the word "fraud" we found ourselves apologising as though it was a filthy word - which to them it is - such is their bias towards the bank. We would have to say maladministration and unconscionable conduct ! Now we are accusing the FOS of fraud and not afraid to say it! I intend to ask the FOS for details of the lender protection insurance we paid for - its not the answer but the question that has the impact. We are still going through the FOS as our case manager is now under investigation by his "team leader" following our complaint about alleged bias and unfair "investigation". We didn't respond to the FOS findings, instead we complained about the bias process rather than dispute the content of the report cos they've heard it all before and it fell on deaf ears so we are turning the attack on the case manager to have his report revoked, and reviewed by another case manager and we are insisting on an unbiased amended report. We have advised that we do not intend to respond to or acknowledge the biased report until they investigate the investigator. Once you acknowledge the report, even to refute it this gives it credibility and the FOS would slam the case shut as they are under no obligation to accept appeals. A year ago we would have been too emotional to play strategies. We don't expect anything from this but it buys time and in the meantime we are bombarding the case manager with requests for documents from the NAB even clean copies of ones we already have! I want our case manager out on stress workers comp leave before I've finished with him!!! Ian and Dawn Boyd v NAB and FOS

  • doyla66
    doyla66 Sunday, 28 October 2012

    PPI [UK] compensation payments could affect UK economy

    PPI [UK]compensation payments could affect UK economy--payments over PPI mis-selling scandal to have greatest personal impact on customers.

    The sums involved in compensation for payment protection insurance could affect the economy. Photograph: Ian Mckinnell/Getty Images
    The scandals involving UK banks are coming so thick and fast that it's hard to keep up. Barclays has been hauled over the coals for fixing the Libor rate, RBS had a massive computer glitch, and now Standard Chartered is in trouble over alleged illegal transactions involving Iran.

    For the average bank customer, though, the scandal that will have the biggest personal impact is likely to be that involving the mis-selling of protection payment insurance. The big five UK high-street banks have already set aside £9bn for compensation payments, of which more than half has already been handed out to customers. As the FT noted in a story on Tuesday, the sums involved, which are likely to grow, are big enough to affect the performance of the economy.

    The windfall gains from the de-mutualisation of building societies in the late 1990s provides a historical reference point for the PPI payouts. When the Halifax turned itself into a PLC in 1997, 7.5 million customers received shares worth £1,500. The handout was worth 2p off the standard rate of income tax, and while some Halifax customers held onto their investment, others cashed in. New car registrations grew more strongly in 1997 than in either 1996 or 1998, there was a pick up in the growth of retail sales, and consumer confidence improved.

    Will the same happen again? Well, new car registrations have been much more solid than might be expected given that the economy has been going backwards for the past nine months. According to data from the Society for Motor Manufacturers and Traders, there have been year-on-year increases in each of the last five months, with sales in July 2012 up 9.3% up the same month in 2011.

    Economic conditions are, of course, quite different in 2012 from 1997. Back then, Britain was five years into a strong recovery, while today it is five years into a nasty double-dip recession. It is possible that individuals will squirrel away their PPI compensation, using it to pay off their mortgage or credit card debt.

    Yet, estimates by the National Institute for Economic and Social Research, quoted by the FT, show that if PPI compensation reaches the worst-case (for the banks) estimate of £15bn, the upshot could be an increase in GDP of 0.7%.

  • doyla66
    doyla66 Sunday, 28 October 2012

    Barclays increases provision for PPI mis-selling £700m[to £2bn] to compensate customers wrongly sold protection ins. with loans

    Jill Treanor, city editor, Thursday 18 October 2012 17.22 BST

    Barclays has now increased its original £1bn provision for PPI compensation twice. Photograph: Dominic Lipinski/PA
    The scale of the payment protection insurance mis-selling scandal was ratcheted up again on Thursday when Barclays set aside another £700m to cover the cost of claims, taking its bill to £2bn.

    The decision by Barclays, under new chief executive Antony Jenkins, to announce the increased provision in an unscheduled statement sparked speculation that rival banks would also need to increase their provisions.

    The additional £700m is likely to result in Barclays reporting a loss for the third quarter, figures for which will be released on 31 October. The bank also admitted that it may need to put yet more money aside in the future.

    Selling PPI – which is designed to cover repayments for customers if they fall sick or lose their jobs – alongside loans proved very profitable for the banking industry. But it is now being shown to have been a very costly exercise, with all the major banks making huge provisions for mis-selling.

    Barclays said it had "experienced higher than previously anticipated levels of PPI claim volumes since the end of the first half" on 30 June and had therefore decided to set more money aside.

    It the third provision made by Barclays. The first £1bn was set aside last year and an extra £300m was added earlier this year.

    "Based on claims experience to date and anticipated future volumes, the resulting provision includes Barclays' best estimate of expected costs of future PPI redress," the bank said. "Barclays will continue to monitor actual claims volumes and the assumptions underlying the calculation of its PPI provision."

    In August, Barclays admitted that claims for PPI had risen to 280,000 in the first half of the year and Jenkins, who ran the retail bank before his promotion to chief executive, has committed the bank to lowering the number of complaints it receives. He previously ran Barclaycard, which was among the banks' business units selling PPI to customers.

    The banking industry has complained that claims management companies, which make claims on behalf of customers for a fee, are clogging up the PPI redress process by putting in claims for customers who do not have policies. Lloyds, for instance, has employed 1,000 people to process PPI claims and reckons that 50% of complaints put in by customers are false.

    Lloyds was the first bank to start making provisions for PPI mis-selling, breaking ranks with rivals who were trying to fight a decision by the Financial Services Authority to make them pay out to customers. Lloyds took a £3.2bn provision in May 2011, although this has now risen to £4.3bn. Royal Bank of Scotland's bill is £1.3bn, HSBC's £1.1bn and Santander – which did not take an additional provision in the first half – has made a £550m provision.

    The total for the big five banks now stands at more than £9bn but other sellers of PPI are also taking provisions.

    Ian Gordon, bank analyst at Investec, calculates that Lloyds is the bank now most likely to need to make an extra provision, on the basis that, like Barclays, it had paid out almost 70% of its existing provision for PPI. The proportions paid out by RBS and HSBC are not as high, which may make them less likely to increase their provisions.

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