Skipton BS faces Legal Challenge over raising rates...

Graham_Devon

HAMISH_MCTAVISH wrote: »

And thats WITH them honouring their guaranteed mortgage rate cap.

Just imagine how much more profit they'll be able to make now that they can tear up contracts at will.

Can the bears come up with a single reason as to why allowing a lender to break it's agreement and stiff consumers who signed up for a guaranteed deal is a good thing? (other than obviously they don't care who gets stiffed if it might help create another crash)

The society had to get rid of 90 jobs just last month.

But for an explanation, may aswell take theirs.

Mr Cutter said the steps were necessary after it suffered a "material reduction" in its net interest margin, which slumped by £33 million to £53 million after the base rate was slashed to an all-time low of 0.5%.
He said: "We have taken prudent action to widen the margin in the long-term best interests of the society.
"In addition, uncertainties remain regarding the economy; the Government's finances; the impact of an historic quantitative easing programme; and the distortions in the UK savings market - we therefore remain vigilant.
"That is why we announced steps, after the end of the financial year, which will enable the society to combat the challenges it faces."

Also, this won't start a crash hamish, we all know it, you are just frothing.

You have told us all so many times that rising interest rates would not cause issues, as people could pay this in 2007....so why you are now talking about crashing and acusing others of stating it (when absolutely no one has), on just 64,000 borrowers is beyond me.

chucky

DaddyBear wrote: »

Not exactly sure what you want me to say.

Estimates in 2007 were that upto 10% of mortgages were classed as subprime. Exact figures are difficult to come by as many were initially prime mortgages that had second or even third loans added on, making them subprime.
In 2007 70% of repossessions were subprime.

You can argue all day about what cause the recession and financial crisis in the UK, but to say that subprime mortgages had nothing to do with it is fantasy.

10% is not the majority, and even if you use other estimates which have come out as low as 1% for subprimes, its still significant. The straw that breaks the camel's back is tiny compared the the whole weight of straw, but its still the trigger.

of course it had something to do with it - it just wasn't the cause or the driver.

but to be clear UK sub-prime isn't US sub-prime. US sub-prime was somewhere at around 28%. what's classed as UK sub-prime which is these self-assessment mortgages and 100% mortgages was apparently 18% in 2007. they aren't US style sub-prime mortgages, proof of that is that we would have had higher numbers of defaults.

here's my view on it for what it's worth - the HPC only happened because of the credit crunch. a HPC was coming and is still coming but the reason for 2008 happening is not because of the number of people not being able to afford but because of the lack of credit.

the HPC due to lack of affordability and people being priced out is yet to come but not for a few years at least.

lemonjelly

chucky wrote: »

i'm not a bull by the way - just a realist

Graham_Devon wrote: »

PMSL.

I'm not sure what's funnier in that. It's either the fact you think you do not argue the bull point constantly, or the fact that considering that, you think you are a realist!

To be fair, there is a point being missed here.
chucky frequently argues a bullish point - but not always. chucky has also contradicted unfounded allegations made by prominent bulls too.

This does get said ad infinitum, but it is perspectives/tendencies which are bullish/bearish. Posters are people. Anyone who feels that they will never change their perspective is treading a very dangerous line. Your expectations should be dependent on context.

In example, when the "asian tigers" markets were rapidly rising, then it would have been very reasonable to expect investors in those markets to be very bullish - the context indicated their growing markets gave vast opportunities. When the asian markets hit crisis point & all currencies pulled out of there, it would be reasonable to assume that most became quite bear-ish, owing to the different context/circumstances.

Now, the fact that the suicide rate leapt up in the downturn, kinda indicates that people did become quite bearish, or even pessimistic in their outlook. Do you know why? Because of their circumstances.

Anyone who is always 100% bull, or 100% bear, regardless of context/circumstances, is in effect a dogmatist with an irrational belief system, & should be ignored/avoided.

chucky

Charterhouse wrote: »

I think it's higher than that but let me find the numbers. The arrears on their entire book are 4.11%. Plus they've taken well over a billion in losses already which are effectively arrears that have already been realised.

here you go - that was last April/May

The bank said that 17,264 mortgage accounts were now in arrears up from 3,492 at the end of 2007. This was equivalent to 2.92 per cent of its total mortgage book, which is well above the industry average of 1.88 per cent.

Northern Rock's worse-than-average position is largely due to arrears in its Together mortgage portfolio, which was on sale before the bank's collapse. The Together product allowed customers to take a mortgage out and get a personal loan on top and arrears for this product now stand at 4.5 per cent — nearly three times the national average.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5836791.ece

DaddyBear

chucky wrote: »

here's my view on it for what it's worth - the HPC only happened because of the credit crunch. a HPC was coming and is still coming but the reason for 2008 happening is not because of the number of people not being able to afford but because of the lack of credit.

the HPC due to lack of affordability and people being priced out is yet to come but not for a few years at least.

Totally agree with that. Interest rates are the key though.

chucky

DaddyBear wrote: »

Totally agree with that. Interest rates are the key though.

spot on but they don't look like moving up for quite while.

if another correction happens due to interest rates it masks the real issues why we're due to have a HPC

Charterhouse

Your article is from March 09....

My numbers are from their own website as of the Q3 update. Full year results for 09 will be available in March 10. 4.11% of the whole book, and 2.85% not including the Together product. Together products made up 29% of the book at the last full year, so I reckon that means that Together arrears are above 7% and those products have also been responsible from most of the losses over the past 2 years, which now stand at about £1.5bio. Another 2.25% of the balance sheet.

Close to 10% losses. Nothing like the numbers that you guys are talking about.

chucky

Charterhouse wrote: »

Your article is from March 09....

My numbers are from their own website as of the Q3 update. Full year results for 09 will be available in March 10. 4.11% of the whole book, and 2.85% not including the Together product. Together products made up 29% of the book at the last full year, so I reckon that means that Together arrears are above 7% and those products have also been responsible from most of the losses over the past 2 years, which now stand at about £1.5bio. Another 2.25% of the balance sheet.

Close to 10% losses. Nothing like the numbers that you guys are talking about.

i think you miss the point - these are the results of a recession that they are suffering

these arrears have little to do with Northern Rocks liquidity issues.

if Northern Rock was able to borrow on the money markets in 2007 would it matter what type of mortgages they offered.

DaddyBear

chucky wrote: »

spot on but they don't look like moving up for quite while.

if another correction happens due to interest rates it masks the real issues why we're due to have a HPC

It does, however, I don't think the correction due to affordability will be that significant. Its the first-time buyers that are key and people shouldn't underestimate the Bank of Mum & Dad.
Of all my friends that have bought, hardly any managed to do it without a gifted deposit. Its not simply a phenomenon of the middle classes either. The Bank of Mum is often funded by re-mortgaging.

Charterhouse

chucky wrote: »

i think you miss the point - these are the results of a recession that they are suffering

these arrears have little to do with Northern Rocks liquidity issues.

if Northern Rock was able to borrow on the money markets in 2007 would it matter what type of mortgages they offered.

You don't think that the markets are slightly more selective about whether they lend to someone with arrears of 0.5% or someone with arrears of 5%? I can assure you they are...