Irish Mortgage Brokers: Not the subject of Primetime report.

IMB is not IMCPrimetime did a special last night on a company called MoneyZone who are part of Irish Mortgage Corporation, today I got an email asking if we were the company featured on the show.

No we are not, we have similar names to our competitor IMC but we are a totally different organization and having no connections whatsoever to them.

The show was about ‘sub-prime’ lending and it focused on how IMC dealt with a customer who was an undercover reporter. Brendan Burgess (he runs the popular finance website ask about money and is the former Chairman of the Financial Regulators Consumer Panel) was commenting from the consumer and compliance perspective.

Here are some of the extracts:

IMC Male Broker: “to be honest its all about if the regulator or somebody goes into the bank they say ‘why did you approve them?’and they quite simply go ‘there’s the lodgements, there’s the money going through” the broker then went on to explain to the reporter how to ‘recycle’ money through his account in order to make his earnings look much higher.

Brendan Burgess: ‘regulation is not just paperwork, or boxes to be ticked’ he is right, regulation is about upholding the law and creating a financial services environment that is functional, proper, just, and honest, otherwise the financial services industry can fall down, in fact to a large degree the issues worldwide which are most acute in the American market are down to people borrowing money [and that is on an institutional level as well]. So any embedded issue in lending are really issues for the whole economy, if lending or the free flow of money in economies comes to a stop then the wider economy will come to a stop.

brendan burgess of ask about moneyIMC Female Broker: “it could be possible that if you did find somewhere a bit cheaper but first of all the valuation would have to come in for the higher price so it would have to, the valuer would have to be on side, or else i suppose whoever was selling the property more so, the estate agent because that’s probably primarily what the valuer would go on, so say you had got the property for 230 and the estate agent was gonna say it was 250, so then what would happen would be, as far as everybody would be concerned, the bank as well as myself, I would say the purchase price is 250 and you would get 85% of that”

I was astounded that Primetime didn’t pick up on the fact that there was an allusion to having professional valuers collude with either a mortgage broker or an estate agent, this is a damning indictment. Then the lady in question ‘inflated’ the reporters figures, is this dishonest? is it illegal? is it wrong? damn right it is on all three counts.

Helping people take huge loans is not really helping them even if the client wants the money, obviously brokers often feel they are helping a person by getting them what they want, while this is perhaps a natural tendency – wanting to help people – getting them into massive debt that they might not be able to service has a serious moral and ethical implication.

Frank Conway did his best to defend Irish Mortgage Corporation, who as a company were not guilty of anything, remember, it was an employee saying these things. However, Primetime did ask if that way of doing business was part of the company culture, and that is definitely a company issue, when asked several times directly whether the ‘procedures’ of IMC were questionable there was never an adequate response from Frank Conway.

frank conwayWhat Primetime should have asked was: ‘where did these ideas and ways of doing business come from?’ did the broker consultants dream them up independently or did that message and way of doing business come from up the line? That question and a direct response from IMC would have cleared everything up quickly and if answered honestly and directly it could have cleared IMC’s name, they should as a respected company have the right to that and I believe Primetime, given the scope of the questions they asked, denied them that opportunity.

We can look at it objectively and wonder ‘Is there something wrong with their procedures?’. First of all, a reporter came in with a hidden camera, and the edits might not reflect everything that actually happened, having said that, it was never admitted in the interview (even in the light of video recordings) that a mistake had been made. The two different people were misleading both the consumer and the bank. Rather than put their hands up and admit things had gone wrong Irish Mortgage Corporation tried to defend their position, sometimes the best thing to do is accept that you were wrong rather than trying to defend that which is indefensible.

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