Northern Rock End of Mortgaged Deal (Merged Threads)

VIGILANT22

b0rker wrote: »

Either way, as many people could have paid down their affordable 125% mortgages (given time) if Northern Rock had not failed them so badly as customers, you come across as a right smug git.

What do you mean could have paid given time???.....Nothing has changed to stop them paying!!......NR hasn't called back in the loans.....

Becles

semanticist wrote: »

If you're unable to change mortgage providers, I'd say that by definition your mortgage is 'sub-prime'. That's not the fault of Northern Rock - if you were with any other lender you'd be in the same position, unable to leave and subject to whims of their actuarial department.

I've been with Northern Rock since 1993. At first I had a joint mortgage with my ex, then I remortgaged with them when he left me and took on the debt by myself. Over the years, as each fixed rate offer expired, I was offered a new deal so I chose to stay with them, expecting this to continue until the mortgage was paid off.

I've since remarried and only work a few hours a week on a self employed basis with DIY accounts. Even though I have a low LTV, I can't move lenders due to my low income.

My husband has a terrible credit record (which he is slowly fixing!), so we have no joint finances as nobody would offer him a loan due to his circumstances. I married him for love not his credit record though He does contribute to the house though so we have the benefit of his wages to pay the mortgage, bills etc.

I'm miffed that I'm stuck now due to circumstances that have happened since I first took out a mortgage, and the rules have changed so I'm not allowed to be offered another deal. I'm worried about interest rate rises as I'm lumped in with more risker borrowers. At the moment we're about 30% LTV and the mortgage is just over 2x total household income.

semanticist

b0rker wrote: »

There but for the grace of god go you.

Whether that grace is your 'god given' intellect or just good luck that you were turned down for a 125% mortgage in Spetember 2007 is something that we can only ponder upon. It would certainly explain the bitterness of your posts on here.

Either way, as many people could have paid down their affordable 125% mortgages (given time) if Northern Rock had not failed them so badly as customers, you come across as a right smug git.

I took out a 106% mortgage in September 2007. I'm in that position. I face the real possibility of losing my house in the next few years.

I'm also sensible enough to realise that no amount of bitter recriminations, no amount of calling 'UNFAIR!', no amount of demanding rights that don't exist is going to fix the situation I find myself in.

There's nothing really unfair going on here. No one is any worse off than they would have been otherwise. If you can't move to another lender when your fixed rate period ends now, then you wouldn't've been able to anyway! You'd still be subject to Northern Rock's SVR, and they'd still have the same risk portfolio that they have now, and the rates would be increasing as they are now, and you'd face higher payments - as you likely will now.

The only explanation for all this that I can think of is that you were promised that your house value would rise allowing you to remortgage. That's what my mortgage broker told me - and it would have even been true if we'd bought a year or two earlier.

But the nature of the market changed, and we're all going to have to suffer the consequences of that. Instead of throwing the rattle out of the pram, why don't you offer some positive suggestions for things we can do to improve our situation?

Start behaving like an adult! Take responsibility, sack up, and try and improve your situation!

semanticist

Becles wrote: »

I'm miffed that I'm stuck now due to circumstances that have happened since I first took out a mortgage, and the rules have changed so I'm not allowed to be offered another deal. I'm worried about interest rate rises as I'm lumped in with more risker borrowers. At the moment we're about 30% LTV and the mortgage is just over 2x total household income.

Fixed rates are pretty much always higher than the current variable rate - you're not really going to be any worse off when your fixed rate ends, but you will have more uncertainty.

If you're at 30% LTV and 2X income, I'd try going to a mortgage broker anyway - the worst that could happen is that you spend half an hour of your life for nothing, the best is that you get some certainty and reassurance about your mortgage - and maybe even save some money.

semanticist

VIGILANT22 wrote: »

Sometimes I wonder if we should have asked people to sit an IQ test before taking on a mortgage

That's pretty harsh - I don't think English is enay73's first language and we're dealing with complex financial services issues that lots of people who are otherwise quite bright struggle with.

I sometimes wonder if the financial problems lots of people are facing now are caused by the 'DIY/self-service' approach to financial services products we have now. A huge number of people leave school without a good grasp of probability and statistics, which leaves them unable to properly judge risk.

Risk is an integral concept in nearly all financial services products. If you're investing in the stock market (either directly or through a unitised investment), you need to understand risk/reward ratios and make a decision about how much risk you can afford - this applies to almost everyone paying into a pension. If you're taking out a mortgage, the cost to you depends on the lender's perception of your individual risk and the total amount of risk they're exposed to.

When you've got a good IFA on your side, they can talk to you and work out how much risk you really can afford, and make sure that you get the right kind of products. When you do it yourself, all you have is your own sense of judgement, which is skewed for many people.

The same people taking out mortgages and credit cards are also buying lottery tickets.

semanticist

enay73 wrote: »

No one has the right to own a house. That's wrong, anyone has the right to own something and not be charged thousands and thousands in interests.

You're incorrect: you don't have a right to buy a house, and if you do buy a house with a mortgage you will end up paying thousands of pounds in interest. You don't really have a right to own anything in particular. Lots of people don't own a house - should they be given one for free?

There's a concept called 'usury' which basically means 'charging unfair interest rates to people who don't have any other choice', but it doesn't apply in this case - the rates are fair, it's just that the amount borrowed is very high.

If you're really opposed to usury, look into 'Sharia banking' - paying or receiving interest payments isn't legal under Sharia law, so there's a growing market for Sharia-compliant banking products.

From what I can tell, most of them are a bit of a dodge - instead of receiving interest on your savings, you get an 'annual gift'. Instead of paying interest on your loan, the bank buys your house or car for you and resells it to you for more money, which you pay in instalments.

MarkyMarkD

b0rker wrote: »

From people like MarkyMarkD repeatedly stating on this forum that NRAM should put their SVR up to sub prime levels perhaps?

I don't think I've actually said that. Anyway, you keep focusing on "sub prime". I have said that NRAM's mortgages are higher risk, not that they are sub prime, and that NRAM's rates should reflect the level of risk.

That means a higher SVR than "normal" lenders is right.

And NRAM/NR's current SVR is already lower than the highest (Chesham BS at 6.45% has been mentioned) and there is no possible justification for this.

MarkyMarkD

enay73 wrote: »

You are saying and of course you can also look yourself on the web, that almost building society are raising SVR.

How come?

Sorry but this is unbelieveable. The interests rate by BOE is 0.5% and it seems that it's still going till the end of the year, but let's see.

How these company can justify the raise of SVR??

Let's use a logical point on here. For what? Making more profits than before and then having big bonuses?
They have actually distroyed the economy, making collapse from the big company to a small individual.
Where the government is at the moment?
It is not a reality here, it's just been greedy.
We are going out the recession and they should be cautious to make this movement as the country could collapse and go in depression.
In other countries wouldn't be even allow. Do you know for example that in my country they even cannot charge more that 1.50% than the BCE interest rate?
This is one of the example how in europe it works and of course in some country how much the banks are regulated. Luckily I do not own anything in credit cards because here interests are so much higher andin other EU countries they even wouldn't allow to keep interests rate on that rage like more than 20%, because they would shut down immediately as considered sharks and unlawful.
I don't want to raise any debate here but we should look more wise and see other reality.
As I said before UK would be far better if they are a bit less greedy.
Last year when the BOE did start to lower the interest rate, Gordon Brown asked the banks to cut their interest rates as they were too far higher.
Where is he now?
It's just unbelieveable, this is a way to put in people in real difficulties and being greedy doesn't help anyone especially a weak economy.
Banks or whatever are doing their businesses but at least should be strongly regulated and avoid this joke to put in a high risk anyone who lives and try with all their own efforts to have a decent lives.
No one has the right to own a house. That's wrong, anyone has the right to own something and not be charged thousands and thousands in interests. People should have a minimum as far you have got a job, you pay for it, you pay your taxes and so on. You should be protected and gain something back.That's a part of the government, the politicians are there for help the county.
You cannot give, give and give without getting something back. This is not a way to work.

(First bit spaced out to make it intelligible).

Building societies get 90%+ of their funds from retail savers. Retail savings rates have not fallen by as much as BBR. That is why building societies are financially stretched.

Most of them reduced their SVRs too much as rates fell, because they expected savings rates to fall in line. At least half a dozen have now put their SVRs back up again, to reflect the real cost of funds.

Everything you have said about "increasing profits" and "bonuses" is just wrong. It's about "reducing losses" and "preserving capital".

MarkyMarkD

Mary_Hartnell wrote: »

Northern Rock used to stand out as a "clever" building society; just as Cheltenham & Gloucester used to stand out as a "lean" well run building society.

Northern Rock used to run, back circa 1970 a clever little scam that involved claiming back tax relief on life insurance policies, until the government woke up and closed the loop hole. (It worked a bit like those pre "open skies" days, when you had to pretend to buy a holiday room as well, to get a cheap air flight. Had you turned up at the hotel you may have found yourself in the most over booked doss house in Europe.)

I'm sure the board members of NR, as they banked their massive bonuses for demutualising, thought this new "pass the parcel" system was the route to riches without end, as they set up "Granite" to get away from the control of the other gang running the country.
To me it smelt just like "the spiral" that bankrupted the "names" at Lloyds insurance about 15 years earlier.

For those of you, with a modest loan to value, who don't have my sense of smell; I say bad luck; but you still have the equity to pick another provider if NRAM does not improve. Remember to watch the statistics and profitability. You might have a mortgage supplier who turns out to be efficient and low cost.

To the 125% borrowers - well you are not that much worse off, because you wanted to live the dream NOW by renting someone else's money, than you would have been had you spent that extra 35% (say) on consumer durables by borrowing it elsewhere.
Vehicle finance for a nice big shiny new SUV anyone?

The UK securitisation market was not, inherently, a bad thing. The whole collapse of the securitisation market was triggered by frankly awful quality lending in the US, which was securitised and then sold on to secondary and tertiary buyers, often bundled up in packages so there was little connection with the original assets.

It was the resale (and purchase) without sufficient attention to asset quality which caused the US securitisation market to collapse, and the UK lenders were caught in the whirlwind.

You are right that in this regard it matched the Lloyds "spiral", but the initial securitisation by lenders was not bad.

VIGILANT22

semanticist wrote: »

That's pretty harsh - I don't think English is enay73's first language

When you've got a good IFA on your side etc......The same people taking out mortgages and credit cards are also buying lottery tickets.

I stand by my remark, however it wasn't aimed at any particular person....

I agree with you regarding the complexity of financial products...I further agree re' advisers...however many people won't use an adviser, why??

A good example is this.... site people come on and ask for "advice"...nobody knows that person's circumstances....this site is not authorised to give advice but we have people using the signature of mortgage advisers???..are they?.and the opposite also you know some people are advisers by terminology/knowledge they use but no signature..but people listen and take note.....Why do people not see an adviser face to face then they will know who they're dealing with....then they have some comeback if things go wrong....Many people wouldn't be in the position they're in today if they had taken advice...If your electrics are broke you send for the electrician...however for many if they require financial advice they ask the guy at work/down the pub.....:eek: