GOLDMAN 555

If you have a mortgage with Northern Rock you need to be aware of the following:

The government plans to half the size of Northern Rocks loan book to £50 billion The way they intend to do this is to jack up their mortgage rates on mortgages they don't want so that people are forced to remortgage and transfer their debt elsewhere thus transferring the debt onto another bank.

Then they will jack up their interest rates on savings so that loads of grannies put their money in. At the end of it they will have siht loads of cash on their books and only the mortgages they want.

It's actually a bloody good plan. A suppose it keeps our money relatively safe.

MJW

Great ! Now lets nationalise British Telecom, Gas, Electric, etc. !

PaulC72

Good move, maybe they can do something right

rossyboy

iTrader: (8)

I've got a fixed rate with a get out clause of about £2.5k.

If I was to offer to sell up and pay them back their cash, what would the chances be of them waiving their clause?

Tiggs

Complete and utter nonsense. NR's business IS mortgages. Its like saying if they took over TESCO they would make food more expensive but offer DVD's at half price.

pimmo2000

iTrader: (6)

I'm with Northern Rock, only been with them 6 months !

Lets have links and facts and not opinions please guys.. kinda important to some people !!!

Luminous

iTrader: (3)

Sounds like a reasonable business plan, and to be honest it is one they have already been following. NRK have not been offering new mortgages at competitive rates for a while.

Those of you who already have mortgages with them have no fear. They cannot change the terms and conditions of the mortgage. They may be able to sell your mortgage to another institution, assuming someone will buy, but again the terms and conditions cannot change.

The only possible/probable downside is when you come to remortgage. Some people will have to find a new lender. That means a little more paperwork and possible legal fees etc.

Tiggs

Dont panic, the original poster is talking nonsense. NR don't have lots of sub prime lending, their problem was their business model not their borrowers. You'll be fine - worst case is you switch to a new lender when your deal is up but that is always a possible anyway whether you owe NR or anyone else.

GOLDMAN 555

[quote=Tiggs;7669804]Dont panic, the original poster is talking nonsense. NR don't have lots of sub prime lending, their problem was their business model not their borrowers.quote]

MMMMM if their loan book was so good why wouldnt any of the big banks touch them with a barge poll and Branson nearly bought them for less than a billion....

Northern Rock borrowers told to go away - Telegraph

lozgti

The business plan seemed to be 'lets mop up the mortgage market by lending to virtually everyone and anyone for any amount at any multiple of salary by using the cheap dosh we are borrowing'

It would be nice to get facts and figures to prove how good the borrowers are.I reckon its more a case of quantity not quality.If not,why not publish all the figures?

Anyway,rates of 8% plus on some deals must be putting people off

Which bank is next do you reckon?

spireite

[quote=GOLDMAN 555;7670158]how did he nearly buy them for a million ,i thought they knocked his offer back

David Lock

So Tiggs - do you expect HMG to turn NR around in a few years and sell it back to the private sector without any major overall loss to the tax payer?

They're in a mess at the moment and will presumably have to stop their aggressive mortgage selling strategy and won't be permitted any better-than-market deals with BoE. I can't see the public rushing to pour money back in as depositors or indeed queue up for mortgages. And the public sector aren't renowned for running businesses efficiently.

I just have the feeling that it will slowly disintegrate over the next decade with bits of it quietly sold off and become one HMG's biggest write-offs in history. dl

GOLDMAN 555

He "wanted" to buy them for £1B but that is buying the debt for an amazing 1p on the pound....

just goes to show how much the loan book seems to be worth

Tiggs

Yes - but more importantly there will be little impact to current borrowers.

David Lock

Except perhaps to those who took on one of NR's more over value mortgages, run into financial difficulties and cannot find anyone else willing to take on the mortgage.

So that could make for some fun headlines when they are reposessed.

"Family of 8 on streets as Darling Rock evicts non-payers"

Tiggs

Thats not happening. I have a loan with them that is 300k and a directors salery of under 10k. I am in the process of re-doing my fix and have a choice of them or two other lenders who have both offered a competative self cert.

lozgti

Probably just read that all wrong,but....

£10k salary
£300k loan
Self certification?

Devildog

The "over value" product is not all secured. Its a mortgage and an unsecured loan.

Bottom line, in general, no one to blame but the borrowers themselves for getting into financial difficulties.

It should be noted that Northern Rock have one of the better performing loan books (secured and unsecured) in relation to default and bad debt.

Tiggs

Correct.

Devildog

Mark will have earnings other than salary, so its no big deal.

Tiggs

but they are not considered, so while i am fine it shows that self cert is as simple as ever.

lozgti

Well,bottom line is we are only at the start of it all.

Watched some of the Bill debate last night.Labour getting grilled on their plans.Do they fatten it up and fall foul of competition stuff or wind it down?

Can't see a middle ground.There was (I think) even the suggestion that the protection of inestors might fall foul of the rules ie,which other bank could offer such cast iron promises? None of them.

So savings might not be so safe after all?? (question not a statement)

Devildog

You're also an IFA are you not?

Tiggs

Sort of - but i don't do mortgages, i use a broker just like anyone else would. I could be a window cleaner as far as they are concerned.

SCOsazOBY

Our term is up in two months and NR have told us to go elsewhere, otherwise it will increase from 5.59% to 7.69% if we stay with them.

lozgti

There is always someone on here who will find you a deal of '3.25% with no fees' or something daft.

Reality is most of the lenders in real terms are around 7.5% mark.

Why isn't anyone noticing how much all the rates have gone up? Have we got to wait till double figures before anyone says anything?

Jay m A

iTrader: (2)

I assume here Tigg's bonus/dividends aren't guaranteed in the eyes of the mortgage lender, plus I believe there are favourable income tax threshholds regarding dividends over slary

OllyK

HMG couldn't turn round a push bike in a few years

MikeCardiff

iTrader: (2)

Was on the news this morning that Abbey (?) and one of the other big lenders are withdrawing their cheap incentive deals for FTB's and generally tightening up on lending - no more 110% mortgages at 5 or 6x salary ( and about time too ! ).

It could happen than if all the lenders tighten up, buyers who took out big multiple mortgages on cheap 2 year deals at 100% ( lots of FTB's in the past couple of years ) could find themselves being turned down by a lot of lenders, and only offered remortgages at much higher rates.

I can see a lot of them who overpaid for starter homes on 100% mortgages that now have no equity in them could be looking at selling and renting instead in the near future.

Not lending over 100% could also point to the lenders not believing prices are going to go up much in the next few years ?

MattN

Yep. As per the contract you signed when you took the loan.

Fixed at 5.9% for x years followed by SVR. Like all fixed rate mortgages!!