Northern Rock End of Mortgaged Deal (Merged Threads)

Mary_Hartnell

MarkyMarkD wrote: »

Let me issue a challenge for the avoidance of doubt on my position - can anyone who is in negative equity with NR genuinely claim that 4.79% is a realistic rate to be paying on what is unsecured debt? Can anyone get an unsecured loan elsewhere at 4.79% without any fees?

I don't think so!

Can anyone get a partly unsecured loan elsewhere at 4.79% without any fees?

Very good point though - compares very favourably with credit cards.

MarkyMarkD

I know what you mean about partly. But I am talking about the unsecured slice which might be as much as 40% for people who borrowed 125%, interest only, and whose property has fallen by 15% or so.

So, e.g. £90k at 6% - reasonable going rate for 90% mortgages - plus £50k at 9% - reasonable rate for unsecured lending to over-endebted individuals = average rate of 7.1%.

Just a bit like the number I first thought of.

Compared to which 4.79% is completely, mind-numbingly, stupid.

Nonshy

MarkyMarkD wrote: »

NR isn't likely to be sold off in any "going concern" form, so leaving it with all the "bad" mortgages isn't an issue per se.

The US, for example, is quite happy with the concept of a publicly-supported "bad bank" with all the bad loans in it. It makes a lot more sense than leaving NR as a mixed bag of good and bad debt - which still probably won't be attractive enough for someone else to buy.

As with most government "thinking", the strategy has been completely changed half-way through.

The original plan was exactly as I would have expected - and desired - it to be - keep the rates high, encourage everyone to leave who can, and keep the dodgier loans but paying an acceptable rate.

Instead, the government lost its bottle, started reducing SVR to silly (relatively low) levels and making it not so bad for most customers to stay - even if they didn't actually have a choice.

Let me issue a challenge for the avoidance of doubt on my position - can anyone who is in negative equity with NR genuinely claim that 4.79% is a realistic rate to be paying on what is unsecured debt? Can anyone get an unsecured loan elsewhere at 4.79% without any fees?

I don't think so!

The Government had zero input into NR's SVR decisions.

Charging higher rates of interest will be of very little benefit to NR, massive strain on customers stuck with NR and NR themselves as after cutting a third of the work force don't have the man power to be chasing these lengthy drawn out difficult repossessions.... coincide with an overall increased panic, worry, uncertainty we are currently in.

b0rker

MarkyMarkD wrote: »

I know what you mean about partly. But I am talking about the unsecured slice which might be as much as 40% for people who borrowed 125%, interest only, and whose property has fallen by 15% or so.

So, e.g. £90k at 6% - reasonable going rate for 90% mortgages - plus £50k at 9% - reasonable rate for unsecured lending to over-endebted individuals = average rate of 7.1%.

So you're suggesting a 7% SVR for those who have a 125% mortgage, 40% of which is unsecured?

What about someone with a 125% mortgage, 25% of which is unsecured?

Or someone with a 100% mortgage, 10% of which is unsecured?

Or someone with a 125% mortgage, 15% is unsecured?

How complex do you want to make this?

You do realise that you are suggesting that NR do something that no other banks is doing and as far as I am aware has never done in setting seperate SVRs for each level of debt owed? In fact what you are suggesting would not even stand up in court as it certainly is not in my T&Cs. What you are suggesting (if it were at all legally feasable) would basically kill NR and assure that they leave the tax payer with a horrible amount of debt to cover.

As for your assumption that NR will never be sold on as an ongoing concern well that is purely that, an assumption.

Come on. Come clean. You have lots of savings and are just annoyed about the low interest you are seeing on it...

MarkyMarkD

I'm not suggesting an SVR set by LTV level at all. I'm suggesting an SVR of 7% - as I have done all along.

That would be perfectly reasonable for the average high-LTV NR customer.

Those with LTVs under 90% can remortgage elsewhere unless their income is inadequate - in which case they are effectively sub-prime and 7% once again is reasonable.

Those in the 90-125% range might - just - warrant a marginally lower SVR but for simplicity a straightforward 7% across the board would have done the job.

And no, I'm not bothered about the interest rate on savings at all. I am bothered about taxpayers' money being thrown away due to NR charging completely uncommercial rates of interest. Did you see their results? Barking.

Who on earth is going to buy NR as a going concern? It will always have a huge proportion of c**p mortgages. It also has a branch network - which hardly any potential buyer needs or wants - and a huge savings base which is primarily there just because it is effectively government-underwritten, which it won't be post-re-privatisation. I just don't see it happening. OK it's an assumption, but I think it's a pretty reasonable one.

Nonshy

I presume you talking about losses of 1.4bn? and a predicted 0.9bn loss for this year? Not bad considering!!

The branch network is minimal.

Savings base is hardly huge and these retail deposits support new business.

In current climate and after recent events I'd say that is quite impressive how NR have reacted to their scenario.... the restructure has been implemented well.... with 67% of government loan repaid.

NR will return to private ownership within 5 years imo and be in a much stronger and structured position than many banks out there.

Your logic is absurd imo

stradlinho

To markymarkd

I'm just happy I was able to get a NR Together Mortgage before it was pulled. I fixed for 2 years on 6.49% which has just expired and I'm now sitting on the SVR of 4.79%.

Happy days and I'm on the ladder !

stephensdan

MarkyMarkD wrote: »

Nonsense

I've no idea what planet you are on but thank god there's no chance of any one takeing this seriously, otherwise we really would be in trouble!

Nonshy wrote: »

I presume you talking about losses of 1.4bn? and a predicted 0.9bn loss for this year? Not bad considering!!

5 years imo and be in a much stronger and structured position than many banks out there.

^ Completely agree apart from I think it will be a lot less than five years.

MarkyMarkD

It will still have a book with billions of mortgages in negative equity, paying stupidly low rates.

How you can imagine that any other lender would be interested in that, I don't know.

stephensdan

MarkyMarkD wrote: »

It will still have a book with billions of mortgages in negative equity, paying stupidly low rates.

How you can imagine that any other lender would be interested in that, I don't know.

I'm almost certain that you really don't think that's all there is to it, likes it's that simple... it's just broke and won't work? you are just playing devils advocate or something right?

And you've asked me a question - you said that you can not imagine why I would think that any other lender will be interested in The Rock...so here goes!

(Below is a huge amount of common sense)

Firstly, what's missing from that statement I've quoted of yours is that every lender currently has mortgage holders with negative equity - all house prices have gone down in value and not just those that are on The Rocks books.

I’ve no idea where you got the figure of 'billions of negative equity mortgages on their books' - and you do realise that as house values go up, the effect of negative equity weakens don't you? Because when it comes to going back private - which will be in the future, the climate (by law of everything that’s true) will have changed. It's not going to be in a permanent state like middle earth or something - and The Rock have already paid back a load of their loan and have even started lending again.

And what’s your point about 'paying stupidly low rates' - they are paying the standard variable rate that's based on the lowest rates in history set by the bank of England - just as they and all other lenders have always done. It's how it works, There's nothing stupid about that, and to be fair, they are still higher than some other lenders.

Obviously - if the base rate goes up, so will the Rocks and all other lenders rates. It's not going to stay at the same rate forever but at the moment it’s perfectly reasonable and nothing surprising.

By being nationalised and put back together by the Government, by the time it comes to go private again - there's going to be a hell of a lot of interest in it. And you think no one will touch it?!?

We aren't talking about a business that's gone to hell here, we are talking about a business that the actual UK Government – (that governs you and me) - has stepped in on and publicly said - right, there's no way we are letting you collapse, we are going to get you back on fighting form, back on your feet and then put you straight back out there to do business again -

I've explained that your point about a book with billions of mortgages in negative equity, paying stupidly low rates isn't close to the reality and The Rock are clearly comeing out of this much, much better off.

(Do you still think no one's going to be interested in them? >>> :shocked: < Look at the confused and shocked little people. Look in to their tiny eyes and start to understand their shocked and confused emotions)

Put it like this, someone else has done all the hard work for whoever wants them. It’s like buying a house that’s already fully decorated and furnished, adopting a kid and not having to go through the pain of labour, playing Mario and having a shortcut from the first level to the end (with 100 extra lives and permanent invincibility) - except buying such a huge business that’s already set up and backed by the government to boot is more likely to make you millions than Mario.

What else do you need? It couldn’t be any more of a safe bet and it’s not often those opportunities come round.

(Thinking about it, I bet Branson gets back in there with Virgin Money.)

Anyway, I'm not sure if you are just playing the fool to see what response you get or maybe you are just a bit misguided or getting the wrong information but what you are saying just isn't true to the state of things as they actually exist....or have ever existed.