Chelsea building society

Ace_Ace

I have a mortgage with Chelsea. Just heard that they have made massive losses. Do I need to worry?

opinions4u

No.

1) They're still trading.
2) You owe them money, so what do you think is the worst thing that could happen?

Thrugelmir

No need to worry. Though don't expect them to be offering competitive mortgage interest rates in the near future.

Ace_Ace

That 1) they go bust and 2) the mortgage is forgotten about. :-)

Thanks for your post.

FraudBuster

The Chelsea Building Society has revealed it has lost £41m ($67m) as a result of mortgage frauds involving some of its buy-to-let loans. The frauds are the main reason for the society staying in the red, with overall losses of £26m in the first half of the year.
The frauds appear to have involved professionals colluding to inflate the value of buy-to-let properties.

http://news.bbc.co.uk/1/hi/business/8213504.stm

SmileyG_2

Chelsea Building Society are another of the building societies that chased the dollar that was "buy to let". It's seen a cull in the boardroom in as much as the previous chairman, chief executive and finance director have all left or are heading for the exit.

The new Chairman, Stuart Bernau is from the Nationwide (who seem to know how a building society should be run).

As a saver, I hope this is the last of the bad news. It should be noted that the Chelsea are undertaking a strategic review, which might see it taken over or merged with another society (not ruling anything in or out to paraphrase a spokeman).

I note that the Chelsea's SVR is one of the highest @ 5.79%. If you have a mortgage with them and can re-mortgage, there are many better options than this, If not, pay it down as quick as you can and get out at the earliest opportunity!

SmileyG

Muhasib

Having such a high SVR is a subtle sign that they would prefer their mortgage holders to transfer to other lenders when their current deals expire - take the hint...

brit1234

Ace_Ace wrote: »

I have a mortgage with Chelsea. Just heard that they have made massive losses. Do I need to worry?

No, its not just Chelsea its all of them, Chelsea are just more honest. The Govornment won't allow it to fail however it may merge with another society.

Its a good thing really it will mean more repossesions bringing house prices down quicker which should benefit ftbs.

roddydogs

Dont worry, Roman Abramovich will step in.

lynnzal

I am hoping they get taken over and the sooner the better. The new parent company cannot have a higher SVR for loans to transferred to as Chelsea is about the highest out there. Then mortgage holders can get a fairer deal.
From a mortgage holders standpoint, I find it ironic that Chelsea keep their SVR high, thereby forcing people to default on their mortgages and therefore encouraging Chelsea to maintain high mortgage rates (yes I understand that they are trying to force mortgage borrowers away to re-structure their books). Surely lowering their rates would assist members with mortgages and reduce payment defaults?

Thrugelmir

lynnzal wrote: »

I am hoping they get taken over and the sooner the better. The new parent company cannot have a higher SVR for loans to transferred to as Chelsea is about the highest out there. Then mortgage holders can get a fairer deal.
From a mortgage holders standpoint, I find it ironic that Chelsea keep their SVR high, thereby forcing people to default on their mortgages and therefore encouraging Chelsea to maintain high mortgage rates (yes I understand that they are trying to force mortgage borrowers away to re-structure their books). Surely lowering their rates would assist members with mortgages and reduce payment defaults?

The rates will be maintained. Savings will be made in the adminstration of the society. The Chelsea BS is not in a position to lower rates. As it needs other borrowers to contribute to the shortfall. The Chelsea is a mutual society owned by its members.