Northern Wreck has issues with "Granite".

WTF?_2

Torygraph are saying 3 billion quid more of our money likely to have to be pumped into to put a sticking plaster on Grantite.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3491836/Another-3bn-at-risk-in-Northern-Rock.html

Northern Rock triggered the £37bn vehicle's wind-up by breaching rules on the size of cushion provided by the nationalised bank to Granite's institutional bondholders. By declining to transfer any more mortgages into Granite, the lender reduced its collateral below the contractual 8.2pc minimum.
The "non-asset trigger event" means that roughly £3bn of taxpayer funds have been seized by Granite and will only be released once all the bondholders are paid back. One senior banker estimated that, at the current rate of repayment, the Government will not be able to recover the money until 2015 at the earliest.
How much is recovered depends on the quality of Granite's mortgage book. The taxpayer will now absorb the first £3bn of any losses in the portfolio, which is rapidly deteriorating in value. Northern Rock revealed yesterday that more than 2pc of the mortgages in Granite are in arrears, compared with the group's 1.87pc in September and 1.18pc in June. If bad debts remain at the current level, the taxpayer will lose about £750m.
At the same time, Northern Rock will forfeit any income from customers' monthly mortgage payments – adding to the bank's woes after a £585m first half loss. It was receiving £15.5m a month, but the money will now be diverted into a "reserve fund" to add to the £3bn taxpayer buffer tied up in Granite.

... and yet another example of the government deliberately spinning the taxpayer liability to be less than it actually was:

The Government has always insisted that Granite was not part of the Northern Rock nationalisation, when the bank's £50bn of on-balance sheet loans were transferred to the state. Until now, it has been unclear how much exposure the taxpayer bore.

This whole thing just gets messier and messier. Still, all the old NR management walked away with handsome payoffs and pensions, so it worked out OK for them......

baileysbattlebus

!!!!!!? wrote: »

Torygraph are saying 3 billion quid more of our money likely to have to be pumped into to put a sticking plaster on Grantite.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3491836/Another-3bn-at-risk-in-Northern-Rock.html

... and yet another example of the government deliberately spinning the taxpayer liability to be less than it actually was:

This whole thing just gets messier and messier. Still, all the old NR management walked away with handsome payoffs and pensions, so it worked out OK for them......

Yes, I had heard the exposure to Granite for NR was £6bn, but I wasn't really sure, so I didn't post it yesterday.

The figure I didn't know was how much NR got from Granite each month - now no longer getting. When Granite is fully wound down - if there is anything left it will go to NR.

Below is a list of some of the other trusts set up by lenders to do the same thing as Granite. As arrears and defaults increase, it will be interesting to see what happens to them.

Gracechurch - Barclays
Permanent - HBOS
Arkle - Cheltenham & Gloucester
Holmes - Abbey
Lothian - Standard Life
Fosse - Alliance & Leicester
Aire Valley - B & B - could be in a similar position -they may not keeping up the necessary % either, plus rising arrears etc, are they still lending? - weren't they the biggest BTL lender?