Northern Rock cut a scandalous 0.15% from Nov 1st

Noz

bilbob wrote: »

Surely the more unnatractive the rate, the more people are unable to pay it off quicker... The higher the rate, the more is taken in interest repayments.

Hence more people remortgaging and redeeming the NR mortgage.

bilbob_2

Noz wrote: »

Hence more people remortgaging and redeeming the NR mortgage.

You don't get it, do you?
The very people who will be put over the edge by the high rate, are the very same people who are trapped within it, as pointed out many times within this thread.

What would you prefer, a quick buck and major longer term defaults and hence losses, or help people actually keep their homes, and make the higher debters more secure and able to pay?

It really isn't rocket science. Although, having said that, NR financiers don't seem to be able to see it. As fast as they are repaying the Govt loan, they are also seeing a doubling of the number of defaulters, and people in arrears. This is NOT a situation any lender wants to be in.

brit1234

bilbob wrote: »

You don't get it, do you?
The very people who will be put over the edge by the high rate, are the very same people who are trapped within it, as pointed out many times within this thread.

What would you prefer, a quick buck and major longer term defaults and hence losses, or help people actually keep their homes, and make the higher debters more secure and able to pay?

It really isn't rocket science. Although, having said that, NR financiers don't seem to be able to see it. As fast as they are repaying the Govt loan, they are also seeing a doubling of the number of defaulters, and people in arrears. This is NOT a situation any lender wants to be in.

They were going to default sooner or latter anyway. The mortgage book is toxic even before people default.

The prime responsibility is too protect savers and the governments money, simple as.

At the end of the day you must take some personal responsibility for your actions. Next you should plan for the worst so if it does happen you can react quicker to protect yourself.

bilbob_2

brit1234 wrote: »

They were going to default sooner or latter anyway.

Seriously, are you saying 'they are all going to default eventually, might as well screw 'em while we can !! So what if we put some people on the streets...'?? Cos that's how it reads.

I AM one of the people affected by the NR affair. I am in IT. I was fairly young when I bought my first and only house, I didn't know about mortgages or buying a house, so I sought professional advice.
That advice told me what I could afford, what I could buy, and how to do it. Unlike some, I do take some responsibility for my situation, and with hindsight, I borrowed too much, but at THAT time, this current situation was unimaginable. Not just for me, but for many of the so called professionals who advise people like me.

Hindsight is a wonderful thing isn't it? So would being in a position where I could sit on such a tall moral horse.

But the fact is that many people are in a similar position to myself: Trapped into a situation from which, with all the will in the world, we cannot escape. We have too high a LTV, so we can't remortgage to a cheaper provider. Even those that DO have a sufficient LTV to get a remortgage, those with a together mortgage (like myself) still cannot escape, as the savings made by moving the mortgage would be wiped out by the increase in charges for the unsecured loan.

We are trapped, by our government, who lent billions of pounds to banks, in-all-but-name bailing them out in much the same way as NR, but in the process found a way of looking like the good guys by making it a condition of the money to pass on interest rate cuts, and yet the bank that IS OWNED by the government, isn't doing the same...

They may have a liability to the savers, but do you not think that they have a duty to their borrowers too? To be fair, and reasonable, do help keep a roof over their heads?
Which do you think will cost more, extending the borrowing so it takes a little longer to pay back the money to the treasury, or the vast sums required to repossess houses, and rehome all those people who will lose their homes, and in the process the stress of doing so will possibly cost them their jobs, damaging families, cursing them with debt and CCJ's that will wreck the rest of their lives? How much would looking after that little lot cost, not just monetarily, but morally too?

I'm one of the relatively lucky ones, right now I can afford my mortgage, and when it goes up next month, by over 130 quid, I will be able to afford it then too. Things will get tight, but I can afford it. Far too many people are in that gap, where the rise will tip them over the edge towards losing their home and possible bankruptcy.
The fact is, that interest rate cuts WILL help these people, as will passing on the full cuts as they happen. These acts will make a REAL difference to the live of REAL families.
I am sincerely glad that you are not in the position of either myself, or one of the above. If you were, you wouldn't be sitting there moralising about how they only have themselves to blame. You would be fretting about how wether you paid some of the mortgage or paid the car insurance so you could get to work, or what you could buy to feed your family for a fiver. Or worrying over when the gas will be cut off.

Sorry for ranting, but your view isn't so cut and dried when you are involved in it.

brit1234

Sorry but its not all hindsight, some of us could see this comming a mile off and acted to effect. You seem yet to be another victim of property ramping media, developers, banks and government. But I still don't see why the government should bail everyone and everything out.


Good luck anyway.

bilbob_2

Who's saying the government should bail us out? I'm not, I'm just asking them not to punish us... very different.

NOTHAPPYWITHNR

HI new to the board,

Just want to add my bit. my NR deal expires in December 08 when my mortgage jumps from 5% to 7.39% which works out £405 extra in interest I will have to some how find.

When I purchased my house 2 years ago I placed a 10% deposit that I worked very hard for and like us all paid thousands of pounds stamp duty and legal costs. I do not consider myself to have lived beyond my means and now find that the value of my property has fallen below the purchase price. I can accept that values of properties can reduce However NR are only prepared to offer SVR even though My credit profile is AA and I have never missed a payment.

I appreciate NR need to reduce the mortgage book. But I will only be able to survive on my savings to cover the additional mortgage payments till April 09 as my salary has not increased however like us all electricty gas council tax food etc have.

I have considered selling my house but the market is dead so thats not going to happen.

I am extremely annoyed and stressed at the way NR customers have been treated as if we are all sub prime high risk customers. My only mistake was choosing Northern Rock when I had the option to go elsewhere and now I am stuck.

Mr Sandler has been given the job to reduce the mortgage book at whatever cost by the govenment, even if that means making people/families homeless. When the government talk on one hand about trying to help home owners and reducing child poverty and then sit back and watch Northern rock destroy 1000s of peoples lives it makes me sick.

Final point is I like most of us have worked hard my whole life and paid a fortune in taxes to support all our services and help this welfare state, having never asked or claimed for anything, will very shortly be on the streets with a 2 month baby thanks Darling.

beecher

NothappywithNR, you'd be on the SVR no matter which bank you were with as you're in negative equity. 7.39% isn't really a very high rate in my opinion - I think the problem is that you have a huge mortgage in the first place as the payments are going up by a very large amount for only a 2.39% increase.

Debs12

7.39% is not competive though in current market. I am in the same sitation as nothappywithnr I am not sub prime, not missed a payment. If I had taken my morgtage with another lender I would be going to their SVR of 6%. Our problem is not with the NR strategy nor going to SVR it is at the same time out LTV rate is decreasing as house prices are decreasing...so cannot use the other options in the market.

NR are repossosing 34 homes a week! How much will this costs the governement in dealing with the homelessness at the other end...what about social responsibility!

Do try and stick in their nothappywithnr. Have you thought about a personal loan to get below the 90%. You could get a loan on a long payment period so when this is all over in 2 to 3 years time you could pay it off when you re-morgagage.ASDA are doing a loan at the moment with no early repayment charge.

How about going intrest only (again a temporary measure until the market improves).

Both these options I am considering but not something I would never things I would need to do ...

The only mistake I made was going with NR!!! I did have other agreement in princibles elsewhere.

House prices will rise again even more so now as their is lack of supply and now less building. I think by 2015 we are going to see not only the market recover but increase sharply.

DO you know what your valution is? My house was valued last August at £188K I owe £165. I am dreading any valution. My house is unique though so it is very hard to value but like everywhere very few homes shifting.

Noz

bilbob wrote: »

You don't get it, do you?
The very people who will be put over the edge by the high rate, are the very same people who are trapped within it, as pointed out many times within this thread.

What would you prefer, a quick buck and major longer term defaults and hence losses, or help people actually keep their homes, and make the higher debters more secure and able to pay?

It really isn't rocket science. Although, having said that, NR financiers don't seem to be able to see it. As fast as they are repaying the Govt loan, they are also seeing a doubling of the number of defaulters, and people in arrears. This is NOT a situation any lender wants to be in.

I very much do get it.

Northern Rock hasn't turned into a charity overnight. A cut has been passed on, but there's no obligation to do so. NR is purposely trying to move mortgages away from them, making them an attractive proposition isn't going to achieve that. The message is very clear, NR do not want mortgage business.