Inquiry over broker lending

THE Irish Mortgage Corporation has launched an internal investigation after unscrupulous practices were unrevealed in its subprime operations.

Hidden cameras used by RTÉ’s Prime Time programme revealed brokers at one of its companies, Moneyzone, advising customers of ways they could subvert the mortgage application process and get a loan that wouldn’t otherwise be sanctioned.

In one video clip, employees told a reporter that he should lodge money to his bank accounts, to make it look healthy, and that he could withdraw this money the day after or even 10 minutes later.

In another instance, a broker inflates the potential customers’ annual salary from €50,000 to €70,000 to increase the amount he could borrow.

Subprime lenders have come in for intense criticism over the past year for irresponsible lending practices that have contributed to the global credit crunch. In this country alone, one house repossession order is now lodged at the High Court every day.

As interest rates climb and unemployment inches upwards, this trend looks set to continue.

Irish Mortgage Corporation spokesman, Frank Conway said they “were very concerned about what they had seen”.

“This does not represent the standards and ethos of the company or its employees,” he said. “This is not part of our culture. It does not represent how we do business. We have absolutely no record of this happening before”.

The company said they had informed the Financial Regulator about the videotape but Mr Conway denied that there was anything wrong with the company procedures.

He also denied his employees had advised the potential customer to mislead the company as to the real state of his finances.

“The loan was not approved here. It was approval in principal. He did not get a loan in the end,” Mr Conway said.