Trapped in Northern Rock Mortgage until homeless!!!

antrobus

fairylight wrote: »

... Bye the way, there could be an issue soon with Northern Rock giving mortgages in the first place, as a lack of disclosure, that they are not actually a British Bank but one owned by an Icelandic company called Granite, I know legally this is being looked into at the moment....

No, Northern Rock was very much a British Bank. Granite, or to be precise, Granite Finance Holdings was not an Icelandic company but rather a Jersey based charitable trust used by Northern Rock for its securitisation programme.

NRAMageddon

opinions4u wrote: »

While the broker made an assumption that property prices would rise forever, an assumption you accepted, if you're mortgage payments are £922 and you're paying 90% of your net pay in debt, where did all the other debt come from? Reading the paragraph above, it sounds like you've consolidated at the time of taking the mortgage and then borrowed fresh funds since. Heavily.

Hi Opinions4U,

Yeah your right, i have borrowed heavily. The apartment that I moved into was structurally unsound and we have shelled out 10's of thousands of pounds just to get it in a condition where it is sell-able and not likely to collapse into the street. Believe it or not, but we were actually covered by the NHBC and they poured 2.5 million into the apartment block (which is a listed building) to get it into a safe condition. The thousands that we spent were for items not covered by the NHBC, which as it transpires....is quite a lot.

property.advert

Have you not thought about seeking financial redress from your surveyor and others who sold you this lemon ?

ILW

NRAMageddon wrote: »

Hi Opinions4U,

Yeah your right, i have borrowed heavily. The apartment that I moved into was structurally unsound and we have shelled out 10's of thousands of pounds just to get it in a condition where it is sell-able and not likely to collapse into the street. Believe it or not, but we were actually covered by the NHBC and they poured 2.5 million into the apartment block (which is a listed building) to get it into a safe condition. The thousands that we spent were for items not covered by the NHBC, which as it transpires....is quite a lot.

How can NHBC not cover a building that is about to fall down?
Sounds very strange.

shortchanged_2

Sounds like another good old story of dodgy advice from a broker. Some of these idiots have a lot to answer for.

opinions4u

shortchanged wrote: »

Sounds like another good old story of dodgy advice from a broker. Some of these idiots have a lot to answer for.

Customer: Hello, I've got lots of unsecured debt and no deposit, but I need a mortgage.

Broker: Well, Northern Rock have this 120% mortgage option will will consolidate your debt, reduce your outgoings by £300 a month and give you the mortgage to buy the property you want. It will cost £920 a month in total, fixed for 5 years. As long as house prices keep going up, hopefully you'll have some equity in 5 years time and be able to remortgage again.

Customer: Yes please.

So please clarify, in what way is it the broker's fault? This one falls somewhere around the feet of borrower, surveyor, builder and NHBC.

shortchanged_2

opinions4u, while yes the OP has to take some of the blame in that it was ultimately their decision to take out and sign for the loan.

However a mortgage broker being considered a sort of financial expert by many has given some very dicky advice.

Did some of these brokers not really see the property bubble coming to an end?

To be fair how many young people are really that financially savvy, particularly when it comes to being a first time buyer mortgagee. Many people are expecting expert advice from these people and I feel that is certainly not what some people got.

opinions4u

shortchanged wrote: »

Did some of these brokers not really see the property bubble coming to an end?

Given that most of the senior economists and politicians in the land appeared to be oblivious of the possibility, I think it's harsh in the extreme to expect a mortgage broker (who's job it is to match the best available mortgage for the customer's circumstances) to have an economic crystal ball.

To be fair how many young people are really that financially savvy, particularly when it comes to being a first time buyer mortgagee. Many people are expecting expert advice from these people and I feel that is certainly not what some people got.

I expect mortgage advice from a mortgage adviser. Nothing more. The posts above indicate absolutely nothing wrong with the mortgage advice given.

What's happened here appears to be a massive increase in unsecured debt after the property was bought. The reasons for that are nothing to do with any advice that the person who arranged the mortgage gave.

shortchanged_2

opinions4u wrote: »

Given that most of the senior economists and politicians in the land appeared to be oblivious of the possibility, I think it's harsh in the extreme to expect a mortgage broker (who's job it is to match the best available mortgage for the customer's circumstances) to have an economic crystal ball.

Do you genuinely believe this?

Or is it more likely a case of keep selling while the suckers keep buying.

NRAMageddon

Howdy all,

Thanks again for your comments, some interesting suggestions and debates seem to be going around....

property.advert wrote: »

Have you not thought about seeking financial redress from your surveyor and others who sold you this lemon ?

Well, shock horror, this was another of the many stupid mistakes we made - we did not get a thorough survey done (although other residents did and no issues were found). Again in retrospect I have been unbelievably stupid and naive and I just hope that this thread helps some people to not carry out the same mistakes as we have. We have taken legal advice about the possibility of taking the company that redeveloped the property to court, but without going into the intricacies of issue the redevelopment company have taken advantage of a loop hole in the law which doesn't make the case as cut & dry as it should be. We have been told that too take it to court would involve a lot of money and there would be no guarantee of winning.

ILW wrote: »

How can NHBC not cover a building that is about to fall down? Sounds very strange.

It is a grade 2 listed building with a number of apartments and the NHBC have paid £2.5 million to correct the mistakes that the redevelopment company carried out. If you are ever unlucky enough to have to claim from the NHBC you will find in the small print that they do not cover a number of items.

shortchanged wrote: »

Sounds like another good old story of dodgy advice from a broker. Some of these idiots have a lot to answer for.

opinions4u wrote: »

Customer: Hello, I've got lots of unsecured debt and no deposit, but I need a mortgage.

Broker: Well, Northern Rock have this 120% mortgage option will will consolidate your debt, reduce your outgoings by £300 a month and give you the mortgage to buy the property you want. It will cost £920 a month in total, fixed for 5 years. As long as house prices keep going up, hopefully you'll have some equity in 5 years time and be able to remortgage again.

Customer: Yes please.

So please clarify, in what way is it the broker's fault? This one falls somewhere around the feet of borrower, surveyor, builder and NHBC.

Well, I think I have been very open and honest about this. I except complete blame in making a number of outrageously idiotic decisions. Starting from the point of accepting a 120% mortgage straight up to not getting a thorough survey completed. Although I clearly don't partition the blame entirely on the doorstep of the mortgage broker, it would be very hard to argue that we were supplied with acceptable advice.

To reference Opinions4U's hypothetical conversation, I dont think it would be asking too much for the discussion with the broker to have gone somewhere along the lines of......

"Hello, I've got lots of unsecured debt and no deposit, but I need a mortgage." (which for the record I didn't say, but instead was a method suggested by the mortgage broker, we would have been happier with a lower mortgage)

Broker: "Well, Northern Rock have this 120% mortgage option will will consolidate your debt, reduce your outgoings by £300 a month and give you the mortgage to buy the property you want. It will cost £920 a month in total, fixed for 5 years. However when 5 years are up it may be difficult for you to find another lender as you are borrowing 20% over the value of your property."

No words of caution were used by the mortgage broker and the conversation certainly didn't go in the direction that Opinions4U stated. At no stage did the mortgage broker even infer to equity or even vaguely imply at any stage that there would be an issue with moving the mortgage after the 5 year fixed rate deal was up, infact the broker actively encouraged higher borrowing without raising the possible implications or permutations which would come into play at the end of the 5 year fixed rate deal. Again in hindsight I really really really should have understood the specific conditions of a mortgage over the sort & long term and grasped the gravitas of what i was agreeing too, but I didn't and I think when your getting advice, advice should be exactly that...advice. There is no doubt that my unbelievably embarrassing lack of financial understanding at the time was taken full advantage of.

I personally see this as a systematic failing of the whole system which emanated from my financial incompetence. Surveyor, Redeveloper, NHBC and yes the mortgage broker have all played their part. Again I would like to caveat the above sentence by reiterating that nobody has played a bigger part in the failings than myself.