Northern Rock End of Mortgaged Deal (Merged Threads)

Nonshy

b0rker wrote: »

Until I see what the specific details of any deals that I may be offered from either bank then I have no concerns as to which bank I am placed with. There seems to be an assumption that terms with the good bank will be preferential over a bad bank. I very much doubt that will be the case. Possibly this would be the case if this was an entirely private bank but as NR is so dependant on tax payers (my!) money then it will not be happening in this instance. They cannot create an environment where my debt is described as bad and then offer me a poorer deal than those they have described as good. I would not stand for that and I am sure that there are many others who would feel the same. I took my mortgage out with Northern Rock not Bad Bank Inc. They cannot transfer my debt to a bank with such negative connotations and then not offer me a good deal. I can imagine it could be difficult to move the debt elsewhere for many people. I have about an 82% LTV so I am sure I can escape if need be but I can imagine all hell breaking loose if people on 100% LTV are dumped into a bad bank and put on 10% IRs etc... If anything they will need to offer people in the bad bank very low IRs in an effort to avoid repossession. They cannot take people who are surviving on the current 4.9% SVR and kill them on a higher IR in a "bad bank". That would be against all kinds of terms and conditions. As I say I signed up for a mortgage with Northern Rock and I will be offered the same terms (or better) as the good bank customers or massive amounts of !!!! will hit the fan for Northern Rock.

'bad' bank is subjective... media and the likes of yourselves label it 'bad'

nothing is 'bad' about your mortgage being with that side of the company except you can't take additional lending or remortgage with them

NR are under no obligation to ever offer you a new mortgage product, no company is. People over time have taken it as a 'right' to be offered a new deal... if a friend lends you a grand then you pay him back with interest... then ask him in a couple of years time for another grand and he says 'no' would you react in the same way?

deefadog

Sorry thought i wrote my explanation here, but it was on my MFW thread

Basically i paid an overpayment of 20k a few years back, but kept my payments the same, so overpaying by around £130 each month, but because i never had a new monthly payment agreement (or whatever the term is) the overpayments were not added to my borrow back. I have sorted this now and they are added, but they can't back date

picardygirl

Received our quarterly mortgage statement from NR (so lovely to actually see it coming down with a slight overpayment!!)!

They enclosed a leaflet explaining how the bank will be split ....

Northern Rock plc - a new savings and mortgage bank that will hold and service all customer savings accounts and some of our existing mortgage accounts. The bank will offer savings and mortgage products.

Northern Rock (asset management) plc - a company that will hold and service the balance of our mortgage and unsecured loan accounts. This company will not offer any savings products or new loans.

Leaflet stated that "we aim to complete by the end of the year".

What happens next?

We will continue to keep you informed and will be writing to all of our customers to confirm which company holds their account(s) when the restructure is complete.

..... Does anybody know how they will split the mortgages between the two companies, what criteria would you need to have to be put into the Northern Rock plc bank rather than into the asset management side ......

MarkyMarkD

The Mail article on the subject says that 80% of borrowers will end up in the "bad" bank with only 20% in the "good" one.

Presumably the 20% will be those with low LTVs which is almost definitely going to exclude everyone who has a Together mortgage.

As usual, rent-a-quote Ray Boulger comes out with some cobblers:

Ray Bolger of financial advisers John Charcol said: 'The greatest danger is if it is sold off.

'It would be politically embarrassing for the Government if the bad bank had a higher variable rate than the good bank, but that wouldn't be the case if it were in the private sector.'

Read more: http://www.dailymail.co.uk/news/article-1223400/Northern-Rock-Brussels-approves-plan-split-Northern-Rock-good-bank-bad-bank-ahead-RBS-Lloyds-carve-up.html#ixzz0XUX4RUHJ

It's only common sense that the "bad" bank will charge higher rates than the "good" bank. D'oh!

picardygirl

We have a fixed rate mortgage with NR and have about 70-75% LTV, depending on how they value our property ........ so its looking like we'll be on bad bank side ...... great ........ we are overpaying at the moment, and keeping our credit rating in tip top condition so when we need to move our mortgage in 2011 we'll have a better chance ...... hopefully!!!!

We will hopefully be in an ok position but there must be thousands of people who extended themselves with NR ........ NR were always trying to throw money at us a few years ago ..... so glad we never were tempted otherwise we'd be in a worst position now !

strippo1305

Hi, im with Northern Rock and my fixed rate mortgage deal ended ages ago but i havent really benefited from the interest rate cuts on my now standard variable rate as NR have kept the interest rate at 5%. I also have a mortgage with Birmingham Midshires where the fixed rate has just ended and they have slashed my interest rate to standard variable rate which is 2% above the base rate which they said they would do when i signed up on the fixed rate.

My question is can NR keep the standard variable rate so high? As what has happened to me with Birmingham Midshires has made me think twice.

Dan:_4

MarkyMarkD wrote: »

The Mail article on the subject says that 80% of borrowers will end up in the "bad" bank with only 20% in the "good" one.

Presumably the 20% will be those with low LTVs which is almost definitely going to exclude everyone who has a Together mortgage.

As usual, rent-a-quote Ray Boulger comes out with some cobblers:

It's only common sense that the "bad" bank will charge higher rates than the "good" bank. D'oh!

Everyone in the bad bank will end up on the SVR at some point. This is already 4 points above the base rate, so I wouldn't expect this margin to increase.

trish123

I got a letter in from them offering me a new deal from Nothern Rock either a 2 year tracker or fixed rate.

MarkyMarkD

strippo1305 wrote: »

Hi, im with Northern Rock and my fixed rate mortgage deal ended ages ago but i havent really benefited from the interest rate cuts on my now standard variable rate as NR have kept the interest rate at 5%. I also have a mortgage with Birmingham Midshires where the fixed rate has just ended and they have slashed my interest rate to standard variable rate which is 2% above the base rate which they said they would do when i signed up on the fixed rate.

My question is can NR keep the standard variable rate so high? As what has happened to me with Birmingham Midshires has made me think twice.

NR (and Bad NR) can do exactly what they want with SVR.

So can almost all other banks/building societies, except the very few which self-imposed rules on their SVRs (e.g. Nationwide who limited theirs to BBR+2%).

Dan: wrote: »

Everyone in the bad bank will end up on the SVR at some point. This is already 4 points above the base rate, so I wouldn't expect this margin to increase.

That just doesn't reflect reality Dan, sorry. 4.5% or even 5% is not a high rate in the slightest for risky loans. Anything over 80% LTV is high risk, as far as the FSA are concerned, and needs more capital allocated to it - and hence is more costly for the lender.

b0rker

MarkyMarkD wrote: »

That just doesn't reflect reality Dan, sorry. 4.5% or even 5% is not a high rate in the slightest for risky loans. Anything over 80% LTV is high risk, as far as the FSA are concerned, and needs more capital allocated to it - and hence is more costly for the lender.

If it doesn't reflect reality then why don't ALL banks have a separate SVR for each LTV level?

Sorry but Dan's comments DO reflect reality in that anyone who signed up with Northern Rock pre-recession did not sign with a sub-prime lender. They signed up for a mortgage with a highstreet lender and their bad bank SVR will have reflect this. Splitting the bank up into low and high LTV and then setting the SVR for the higher LTV customers at a higher rate will not happen. If splitting your mortgage book in such a manner were to be standard procedure then surely all banks would be doing it. It is not standard procedure it is the procedure of a mortgage lender that !!!!ed up big time. I will not accept being stuck with Northern Rock and having them force me onto a sub-prime SVR. It is not what I signed up for when I agreed the mortgage with a highstreet lender with highstreet lender SVR promises. The rules cannot be changed halfway through the game. It would be different if everyone on the NR SVR had the choice to move away from NR but many will be stuck on the NR SVR. As that is the case then there is no way that they can set the SVR at a lower rate for the "good bank".