Northern Rock

Me too. I think the media has spun it however they please to make a story - the converse of the reposessions is the taxpayer picking up the tab for people who are unable to pay. And I don't think that's right - there are mechanisms in place to help people in financial difficulty - Northern ROck is not one of these mechanisms.

i don't. they've done some spectacularly bad lending deals and decisions. ok, yes some people were stooooopid enough to sign up for them, but they've been far from a responsible lender

they deserve every bit of bad press IMO (and in my limited finance experience)

I know they've done some bad lending, but they aren't the ony ones who have done this, some of the crap deals my past employer issued makes me feel sick when I think about it. It only seems to be NR who are gettng the negative press from it though.

If they were allowing people to stay in their homes without paying the mortgage, there would be people complaining about it and shouting about how they are making no effort to pay their loan back to us tax payers.

well i can't argue with that

i heard a discussion on jeremy vine the other day (well, i heard it was coming up, didn't actually hear the debate) that if the banks are going to be 'owned' by the government, and therefore us too, can they morally make anyone homeless?

Sure, Northern Rock foolishly made loans to people who were less likely to pay them back. And people who were less able to sustain a mortgage (foolishly? at least over optimistically) took them. Now those chickens have come home to roost, the only responsible thing for NR to do is to repossess where borrowers default. I don't want my taxes, which have already been used to bail out NR savers (fair enough, I'd want that too if I saved there) spent supporting people who default on their mortgage. Supporting defaulters mortgagees now won't change the fact they can't maintain the mortgage.

On another point - Northern Rock have been vilified - I think reasonably. Why though have the people who borrowed too much not come in for any comment? (Or not that I've seen.)

I thought the story was that they were being overly enthusiastic and too quick to reposess. There was a woman on the news earlier who had been trying to get help from them because she missed two payments, and they were trying to reposess her house.

Northern Rock sold a product that was underwritten by Lehman's. If at the time they were certain the risk could be covered, in theory they have not done anything wrong.

Yes - stupids to LTV more than 95%, but same could be said to a person taking on the risk.

I think to date they have repaid £16M, so will be wanting to offload risk ASAP.

Yes, NRK made some stupendously bad lending decisions (along with most high street banks, let's face it), but now they are nationalised then they have an extra burden of care to look after the money. If the moral hazard of letting people borrow large amounts of money, far above their ability to repay, was bad, it's worse to penalize the taxpayer by being a soft touch when it comes to repayments.

And surely it's a reflection of their poor quality loan book that they have higher numbers of repossessions?

For some reason I can't quote KitC.

Anyhoo - if someone in a council house didn't pay their rent would the council morally evict them? Of course they would. There would be outrage if some individuals were allowed to stay rent free when everyone else paid their rent and their taxes to support the council housing in the first place.

If there is any morality concerned at all here, it is about repaying a debt you've undertaken. Who that money is owned to is irrelevant really. However, I'd argue if that money is owed to the state - and therefore owed to everyone else in the country, not a private shareholder - there is even a greater onus on the borrower to repay or allow the house to be sold to repay the debt.

Why is it OK to use my taxes to subsidise someone in a house they've bought privately when they can't afford it anymore? If so, I'd like my mortgage paid please.

Having to leave your home because you can't afford it anymore is terribly sad and my heart goes out to anyone in this situation. However, it is what it is.

They may be acting quicker than they have in the past, but I guess it must be all legal and above board. As for someone who missed two payments, I would like to know if theres more behind it. I used to work in NR mortgage arrears and find that hard to believe. It maybe that she had past form where she had been an irregular payer for example.

I have a mortgage with NR (and for what it is worth I don't think I was stupid/silly/whatever you want to say) to take the mortgage out. I took it out because they were offering the best deal.

I don't think it is just mortgage rock customers who are fighting reposession - it's just NR have had so much bad press.

i don't think anyone's said every NR deal was a poor decision, and all their customers are stupid, there's no need to be defensive. but i'm guessing you aren't the casual labourer bloke and his wife who worked part time in asda that i once met, who'd signed up to a mortgage of £900 a month for their £270 a month rent council house, on a 95% LTV self cert mortgage, from NR

that's the worst example i can remember

I'm not being defensive, I don't need to be.

I was really replying in response to this...

Yes - stupids to LTV more than 95%, but same could be said to a person taking on the risk.

I took a 100% out for a lot of reasons but for me it wasn't a stupid thing to do. For others of course it will have been. (I have a friend who is in trouble with NR because he can not afford the mortgage).

For some reason when you mention to people your mortgage is with NR they take pity on you.

Why would anyone do this? I'm not very good at maths but I would think "OK we take home £X, so £X minus £900 equals less than nought, so how would we buy food?", etc.

I don't know why anyone who didn't pay their mortgage would think that they could get away with it? What about cars on HP? If you didn't pay for you car you'd expect someone to come and take it away, wouldn't you?

Sherry, I don't think anyone was suggesting all NR customers are numpties. We have a mortgage with them, which went through the day all the NR stuff hit the news, and have mortgage we can afford. In fact, it's really good as we can overpay or take payment holidays etc.

It's because Keef sold mortgages to stupids. ?

I mean 'why would anyone do this' as in the buyer - why would they do it? I just don't get it.

There were a couple on the telly about 3 years ago who had borrowed £100k or something and only earned £5k a year jointly. You don't have to be Carol Vorderman to work that out.

i have absolutely no idea. but they were genuinely amazed when i wouldn't give them a loan...

I guess its because people aspire to own their property. When offered a right to buy they are getting it extremly cheap and therefore don't want to miss out on an opportunity.

Amazing!

Nationwide lent me £10,000 over a year once when I earned about £23,000 a year. I was quite amazed.

Sherry, I don't know your exact situation, but in most cases it is a very bad idea to get a 100% mortgage, especially if you are only fixing your mortgage for a short period, due to the increased risk of the value of the property dropping below your mortgage value.

A friend at my old work got a 100% mortgage mid last year, they fixed the deal for one year. Now they are stuck with a high standard variable rate and can't switch because the value of the flat is less than the mortgage, so can't re-mortgage, and this is happening a lot around the country due to how easily these 100% mortgages were given out

We have a fixed rate mortgage with NR. It was for 5 years and has another 2 years to run, and was 100%. When we get to the end of our fixed rate, it's likely we will have no equity in the property (I don't think we'll have negative equity, but it's a possibility) so we are likely to need another 100% mortgage at the end. However, despite us being reliable and perfectly capable of paying it off it seems unlikely that NR will offer us a favourable rate or even just the same we were on, as they seem to be offloading all their customers, even ones like us who are relatively low risk.

However I don't think we were stoopids to do what we did necessarily. Our mortgage payments now are well within our means. If they doubled, which is unlikely as we are already on a relatively high rate anyway, it would still only be MrSC's take home pay. We'd have to tighten our belts, sure, but we could manage.

<hoping desperately that I know what I'm talking about>

We're in exactly the same position, spacecadet. we couldn't afford to rent and save for a deposit, but we could afford to buy with 100% mortgage. we did so, fixed rate for 5 years. then we ported to a bigger property just before the northern rock was nationalised. we can pay our mortgage without a problem at the moment (actually mil is paying it for us this year, but you could say she was paying for my pgce, depends how you look at it) and should be ok until the fixed rate is up in 2011. i'm hoping the mortgage situation picks up before then - don't want to have to pay commercial rates for the unsecured part!

SC-See thats what I mean, thats why I said mostly not all times a bad idea. If you take out a mortgage you know you can afford if it goes up a lot, then that is fair enough, it is those already stretching themselves with the "great deal" that are going to have problems.

Hopefully when your fixed rate ends there will be more doign 100% mortgages again. It may be worth trying to save something (if you can) in case those, as I work for a housing association who do deal a lot with mortgage lenders and not many lenders are doing 100% mortgages at the moment (mainly medium size building societies)

SC99 I don't think they are doing any new mortgages. When we rang them about ours they refered us to LLoyds TSb without asking any questions.

Unfortuantely some people including me could not do anything but get a 100% mortgage - it is in my affordability even if something happens with my job (which is unlikely, teachers are always needed - I will be fine). However, it is in negative equilty at the minute due to the current market etc. However, I believe I was not stupid at the time and don't believe I am stupid now (not your words I know). Others may believe so, that is upto them. I still have 4 years left on my mortgage, the property will soon be rented out and the mortgage will still be paid.

I know for *some* people taking a 100% is not a good idea. As KtC pointed out. But that doesn't mean everyone with a 100% mortgage went into it with their eyes closed.

Exactly, again you gave yourself a good fixed period for your mortgage, so are unlikely to be in negative equity at the point you have to re-mortgage.

Yes, our fixed rate ran out in August, and they've written at least 3 times offering to help us find another lender ?. However, we're trying to sell, so aren't in a position to even look at moving mortgages at the moment.

We have a buy-to let mortgage with NR which runs out this month. As others have said, they are not offering existing customers any new deals, as they want to offload as much debt as possible.

Also, when the base rate dropped 0.5% they have only passed on 0.15% to customers (variable rate fell from 7.49 to 7.34)

Most of the other lenders are still offering buy-to-let mortgages - but at silly fees (eg 2% of loan - which on our £200k mortgage is £4k - eek). So we may have to stick with NR on their variable rate.