Bradford and Bingley Default

sabretoothtigger

The B&B mortgage book was good last I read, the default rate was below average as is true of BTL apparently.
I dont about it now and of course they were buying up gmac debt right till the end, who knows how bad that is


Peston wrote on this today, bb is being wound down to zero hence the sale of its retail outlets whereas nr will be refloated maybe

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

Thrugelmir

B&B, which was nationalised last September, says that without any asset sales, its £41.9bn residential mortgage book will only shrink by £5.6bn by the end of 2011.

It says many customers cannot refinance elsewhere as rival banks have pulled out of the buy-to-let market. Some customers also have little equity in their properties and so are unlikely to be able to remortgage with other rival banks which are now enforcing stricter credit criteria.
B&B has already tried to encourage customers to leave by waiving early redemption charges for those who redeem all or part of their mortgage by June this year and has closed its doors to new mortgage applications.

Commercial mortgage customers are being encouraged to refinance with another lender rather than renew their B&B loan when it matures.
Bradford & Bingley’s approach contrasts with what happened at Northern Rock in its first year after nationalisation when the Newcastle bank shrank its £84bn loan book by encouraging borrowers to redeem their loans and remortgage with rival banks.

In its business plan, which has a ten-year time frame, Bradford & Bingley said it would focus on running down its balance sheet, servicing its mortgage book and collecting arrears. It is looking at outsourcing some of its processing work. The business plan must be approved by the European Commission.

B&B said earlier this week that the performance of its mortgage book had deteriorated sharply in 2008. The proportion of accounts which are more than three months in arrears or in possession stood at 4.6 per cent against 1.63 per cent in 2007.

The lender expects further deterioration in arrears in 2000 and 2010

From the FT on 2nd April 2009.

No wonder the Government wants the BOE to keep interest rates low! Take a few years to ascertain the extent of bad debt write off's.

pickles110564

Thrugelmir wrote: »

From the FT on 2nd April 2009.

No wonder the Government wants the BOE to keep interest rates low! Take a few years to ascertain the extent of bad debt write off's.

Dont you mean that the Government will keep the interest rates low until they ascertain the true extent of the toxic debts.

Thrugelmir

pickles110564 wrote: »

Dont you mean that the Government will keep the interest rates low until they ascertain the true extent of the toxic debts.

The BOE is independent.

tomterm8

Thrugelmir wrote: »

The BOE is independent.

How do you reach that conclusion? The MPC of the BOE is theoretically independant, but the BOE itself has never been independant of the government.

In practice, even the MPC is subject to the fact the government has power to set the objectives pretty much wherever it wants.

pickles110564

Thrugelmir wrote: »

The BOE is independent.

Cant you remember when Brown cut the rates before the monthly meeting, sorry to disappoint you but they are only there to blame when it all goes belly up.

Thrugelmir

pickles110564 wrote: »

Cant you remember when Brown cut the rates before the monthly meeting,

No, when was that?

Thrugelmir

tomterm8 wrote: »

In practice, even the MPC is subject to the fact the government has power to set the objectives pretty much wherever it wants.

Thats strange as "Decisions of the Monetary Policy Committee are made on a one-person one-vote basis, with the Governor having the casting vote if there is no majority".

No mention of the Government telling the members how they should vote :rolleyes:

tomterm8

Thrugelmir wrote: »

Thats strange as "Decisions of the Monetary Policy Committee are made on a one-person one-vote basis, with the Governor having the casting vote if there is no majority".

No mention of the Government telling the members how they should vote :rolleyes:

Oh sorry, I must have been mistaken /sarcasm.

The role of the monetary policy committee is established, in law, under the Bank of England act 1998 part II. Its decisions are made in accordance with objectives set in s11 of the act, which are to establish price stability and, subject to that, to support the economic policy of the government.

Under s12 of the act, the treasury, without consulting parliament, has the authority to determine what price stability means and what the economic policy of the government is.

Under s13 of the act, the Government appoints the members of the MPC for a period of 3 years. .

Under s19 of the act, the government after consulting with the governor of the bank of england, has the authority to override any decision of the MPC, to make any alterations to part II it sees fit, providing only that the order must be laid before parliament within 28 days and that these changes may last only three months.

sabretoothtigger

I remember a couple people posted they had bb pibs so this must be good news for them. Pretty sure these things were selling at 15% yield at some point or higher for anyone who bought in 2009

Joanne Hart of the Mail on Sunday has said that Bradford & Bingley perpetual bonds investors can take heart in the fact that the government has agreed to repay the money with interest, although it may not happen until 2018.