Northern Rock

Pobby

Having flunked economics at school I don`t regard myself as an expert.However all this about Northern Rock was pretty inevitable.I am sure over the next few months they will not be the only ones to suffer.

Clearly lenders have been less than prudent in their criteria for issuing loans.Much of the blame has been hoisted on the USA sub prime lenders but is this really the case?Here in the UK we have generated our own sub prime market.5 times income lending,self certificated mortgages(lie to buy) have been bandied around for siome time now.Endless advertising from the likes of Ocean Finance and others bombard day time tv.

In my own case I applied for a credit card recently.Even the guy at the bank was amazed at just how high the credit limit I was awarded.

The lending houses have,through their own greed brought this situation upon themselves.The next few months will be ``interesting``.

madmoney_2

omg!! just seen the news n all the people stood queing outside northern rocks offices!! unbelievable!

cheets99

Pobby wrote: »

Having flunked economics at school I don`t regard myself as an expert.However all this about Northern Rock was pretty inevitable.I am sure over the next few months they will not be the only ones to suffer.

Clearly lenders have been less than prudent in their criteria for issuing loans.Much of the blame has been hoisted on the USA sub prime lenders but is this really the case?Here in the UK we have generated our own sub prime market.5 times income lending,self certificated mortgages(lie to buy) have been bandied around for siome time now.Endless advertising from the likes of Ocean Finance and others bombard day time tv.

In my own case I applied for a credit card recently.Even the guy at the bank was amazed at just how high the credit limit I was awarded.

The lending houses have,through their own greed brought this situation upon themselves.The next few months will be ``interesting``.

Aye, some of the threads on here with "in £25k debt can't make minimum payments" is shocking and its starting to have an effect on the UK economy. The sooner we go back to the days of saving up for something and not buying pointless luxuries the better.

madmoney_2

i second that cheets, i hate trying to keep up with the jones' new conservatory, car, leather suite etc, so ive given up trying. if i want somet ill save for it n the sooner every1 else adopts this way of thinking, the more impressed ppl will be when they see a gorgeous car or that brand new patio. I personally walk past my neighbours houses now n think "yeah, looks nice their garden, but i wonder how much interest they are paying on it?" but maybe thats just me...

scottishsuz

Nope, not just you madmonkey. I look at people in pretty cars or wearing the latest threads and wonder just how much of it all they could actually afford and how much of it is on tik. Unless I have an unexpected crisis it will be saving all the way for me from now on.

As for the NR situation, not sure that there is any immediate issues, a lot of the reports on the TV and in newspapers and hyped up surely?

cheets99

Yeah glad I have got my credit card down now to a reasonable amount, highest was £2k, would hate to have a lot of debt now, the way interest rates, food/energy bills are going up and now the stock exchange is shaky.

rayday2

madmoney wrote: »

i second that cheets, i hate trying to keep up with the jones' new conservatory, car, leather suite etc, so ive given up trying. if i want somet ill save for it n the sooner every1 else adopts this way of thinking, the more impressed ppl will be when they see a gorgeous car or that brand new patio. I personally walk past my neighbours houses now n think "yeah, looks nice their garden, but i wonder how much interest they are paying on it?" but maybe thats just me...

If you walked past my garden you would think "bless them they obviously have no arms!"

SWS_2

Some of you may be surprised but I agree with the comment that people with mortgages shouldn't be given credit cards or loans, just have it immediately secured on the house. It would have certainly made us think twice. NRock could have done that with us but they chose to give us an unsecured loan at a higher rate of interest as obviously they stood to gain more. They now want to secure the loan, which I can understand but it is the way in which they are going about it that has seriously upset us. There is also the chance with the difficulty they are in that they may try and force sale for the comparatively small amount they will get. If this whole thing has taught us anything it is certainly if you can't afford it you can't have it, a lesson which I think should have been more widely spread previously. I hope that the introduction of financial lessons in schools goes through as in my time, credit was virtually thrown at me when I first started work - the start of the sprialling debt.

shopaholictiedtheknot

OMG we only just got our mortgage with them last month, what on earth will this mean for us? Are there any experts on hand to advise at the moment? I am in a panic now :eek:

Pobby

shopaholictiedtheknot wrote: »

OMG we only just got our mortgage with them last month, what on earth will this mean for us? Are there any experts on hand to advise at the moment? I am in a panic now :eek:

Can`t see that there is cause to panic at this time.Should NR fail/get taken over,your mortgage loan will just be transferred.I would,however,brace myself for some some upward movement in interest rate rises.It is a great shame that many``innocent`` borrowers may have to suffer because of the crazy loans that have been dished out by the various loan companies.

As I stated before,I am no economist but I could see this whole pyramid scheme called the housing market coming unstuck at some point.