MSE News: Co-operative Bank: how safe is it, after Moody's downgrade?

ColdIron

robs349 wrote: »

the total fund amount per year under the compen scheme is 4 billion

I've often wondered about the 4Bn, as you say it isn't enough to bail out a Barclays, particularly given the bigger banks are the bigger guarantors, though it could cope with an Aldermore or Metro Bank. I think I read somewhere that it has provided 20 or 30 Bn already (Bradford & Bingley, Heritable, Kaupthing, Singer & Friedlander, London Scottish Bank, and Landsbanki)

The reality is that UK plc couldn't allow one of the big high street banks to fold and would simply print the money. You'd get all of your pound notes back but the value of those pounds is another matter

It's hard to know what else to do. Equities, bonds, property? These are not without risk either

Leblanc_2

robs349 wrote: »

the total fund amount per year under the compen scheme is 4 billion, about 1000 for 4 million people. it's nothing more than a confidence boosting scam to stop you running to the bank.
cyprus was a shout for the hard of hearing! anyone who thinks their 85 grand cash will be safe in a really serious economic crisis (the last one was just a taster) is seriously deluded. have a look at some history- 1929- the south sea bubble- john law french land bank - tulips etc. if you're going to keep your hard earned you better start educating yourself about how it works, the nice government people aren't going to save you! i mean seriously? you believe this? they can't possibly, where would the money come from? trillions of it! don't get suckered with the newspeak, its not a triple dip or any other euphemism, it's the crest of a huge depression. there. i said the dreaded word! it really angers me that this site and the media at large keep peddling the 85 grand'll be fine, don't worry fairy tale. you know what they call the easy start etc mortgages? the neutron mortgage.
the houses are still there but all the people are gone!!
ok i'm off, now read all the ah but posts that follow this. actually, don't, go find out for yourself. good luck.

After the nihilism what is your panacea?

What do I do with my savings?

Ecojan

edwara wrote: »

so if I have money sitting in my overpayment fund against my mortgage with the Co-op should I be moving it? or will it just stay there hmmm? it's under 85,000 I have always been really happy with the co-op their customer service is excellent and our mortgage is a really good deal. fingers crossed its all ok

I am in a bit of a quandary too. I need to put a couple of thousand agasint my Coop mortage to offset the possibility of being made redundant later in the year. I understand that it can be drawn on to pay your monthly mortgage.
What happens to a mortgage if a bank goes down? Do you have to remortgage, is your repayment covered by the £85000. Any info please anyone who has ben through this. I was intending to make this savings transfer this week..............

antrobus

Ecojan wrote: »

....What happens to a mortgage if a bank goes down? Do you have to remortgage, is your repayment covered by the £85000. Any info please anyone who has ben through this. I was intending to make this savings transfer this week..............

Your mortgage carries on as before. Somebody else may well end up managing it, in the same way as former NR and B&B mortgages are now being dealt with by UKAR - UK Asset Resolution Limited.

jamesd

Ecojan wrote: »

I need to put a couple of thousand agasint my Coop mortage to offset the possibility of being made redundant later in the year. I understand that it can be drawn on to pay your monthly mortgage.

Your understanding is unsafe.

The ability to draw on overpaid funds is normally at the discretion of the lender. You should assume that they will laugh at you if you tell them that you are unemployed and then tell them that you want to borrow more money by withdrawing overpayment funds.

You can reasonably safely do this with money in offset savings accounts, where the money is yours by right. This is a significant advantage of offset mortgages compared to those that merely allow overpaying and discretionary withdrawing.

If your mortgage is sold, you may end up with nothing other than the minimal requirements in your mortgage contract. To give you some idea of what that may be, here's what First Direct thinks they can do just because they are uncomfortable with some lawful and in accord with account terms things:

1. remove the current account and savings accounts.
2. remove the offset facility for those accounts, so the offset mortgage is no longer an offset mortgage.
3. remove the ability to withdraw any overpaid funds

In addition, without selling the mortgage or having it transferred, they believe that they can:

4. decide what lawful and within the account terms and conditions transactions they will and won't let you do and tell you that they will use steps 1 to 3 if you don't comply.
5. decide which investment vehicles and tax wrappers they will let you pay into or withdraw from, how often and how much and tell you that they will use steps 1 to 3 if you don't comply.

To find out your actual rights if the mortgage is sold, consult your mortgage contract and assume that all good will and discretionary terms are read in the way that is most unfavourable to you. In general all you can be certain of is that you will have a right to continue with repayment or interest only payments at the contractual interest rates or following the contractual rules for them changing. Most of the rest tends to be discretionary and you should expect that you will no longer be able to do things like port the mortgage to a new property.

With redundancy possible you should not be overpaying on the mortgage. You should be putting the money where it is certain that you can get at it, with no lender discretion involved, and perhaps evaluating drawing down past overpayments to accumulate a larger accessible reserve.

robs349

Leblanc wrote: »

After the nihilism what is your panacea?

What do I do with my savings?

Leblanc wrote: »

After the nihilism what is your panacea?

What do I do with my savings?

well, that's the tricky question, but by asking you've taken a big forward leap, keep asking and looking.
the answer will be unique to your circumstances lifestyle etc.
don't do what everyone else is doing.
completely forget about interest, keeping hold of the capital will be an achievement. anyone paying you interest could go bust!
keep a good chunk in cash, the authorities are 2 mouse clicks away from shutting every ATM on the planet.
get some $s in cash, they're always going to be worth something more than the rest, or and swiss fr.
consider buying some SHORT DATED govt gilts, 2,3,years mat. the govt has to honour those, although they could prevaricate a bit.
DON'T buy gold through a bank, IT'S NEVER yours, just a promise. you've missed the boat on gold now anyway, but coins etc will always have some value, even though it's less.
the point is, have stuff that's real, that people are still going to need. there will be a cost to doing these things, but that's just the price you need to pay to keep safe/secure.
none of this is direct advice, just ideas to think about, basically, you're on your own! the easy days of getting looked after are gone!
good luck.

robs349

ColdIron wrote: »

I've often wondered about the 4Bn, as you say it isn't enough to bail out a Barclays, particularly given the bigger banks are the bigger guarantors, though it could cope with an Aldermore or Metro Bank. I think I read somewhere that it has provided 20 or 30 Bn already (Bradford & Bingley, Heritable, Kaupthing, Singer & Friedlander, London Scottish Bank, and Landsbanki)

The reality is that UK plc couldn't allow one of the big high street banks to fold and would simply print the money. You'd get all of your pound notes back but the value of those pounds is another matter

It's hard to know what else to do. Equities, bonds, property? These are not without risk either

yes they could! they just need a banking system, not all those banks. the americans let lehmans go after saving bear sterns.
.they should have let bear go, it was first.
same with northern rock here, should have let that go but it was easy to save to keep the facade instead of dealing with the reality.
didn't work, so then it was RBS, HBOS and lloyds tsb.
TSB by the way, was the only AAA rated bank in this country a few years ago! RBS shares lost 95% of their value. 95%!!
incompetents will try to hold on to their status no matter what the cost. whatever a politician, gov economist et al says, you seriously consider the opposite.

robs349

bang on! you're right.

robs349

sorry that was to jamesd, not really a poster, so not great with how all this works

CynicalC

I simply don't trust any of this- it seems like insider dealing designed to try to destabilise a bank or a country so that their value reduces and then someone else makes money on their value reduction. The worse credit rating should be for the UK and USA with their MASSIVE debts. It is all a farce. I feel I should put all my money under my mattress!! I loved the headlines I read the other day that even the double dip recession was just a stupid accounting error!