The Mortgage-Northern Wreck, erm Rock I mean.

by Pershing36 13.12.11 10:38

Just a thought. I was always under the impression that Northern Rock dealt mainly with higher risk loans. The notorious 110% loans and self certified loans all helped bring their downfall into a public bailout.

I wonder why professional, highly paid people would choose this company?

by Guest 13.12.11 14:21

Why has Richard Branson been desperate to get his hands on them?

by Xavier 13.12.11 15:22

Stella wrote:Why has Richard Branson been desperate to get his hands on them?

Methinks you jest, Stella. RB is not an idiot.

When Northern Rock were rescued it was split into two -

Northern Rock PLC (the clean banking business)

Northern Rock Asset Management. (which contains all the crap)

RB has bought the PLC.

Some idiot also stipulated that the PLC had to be sold by the end of 2012.

by uppatoffee 13.12.11 15:25

Pershing, this would be my guess at why the McCanns used Northern Rock for their mortgages.

They paid £459,950 for their house back in January 2006. At the time they had three children so Kate and according to the background information on her provided by Leicester Police she was still on Maternity leave at the time (even at May 2008 this listed as being the case). This is well beyond the normal time so she would not be earning much, if anything. This would have left Gerry's £75k salary. Normally mortgage companies will only loan an income multiple of 4x. Meaning that they would only be able to borrow £300,000. Many people used Northern Rock as they offered much higher multiples than normal banks/buildings societies. By May 2008 we know that their mortgage was £323,493, and this is after nearly two and half years of repaying around £2,000 a month. Therefore they must have needed a considerably higher amount to start with, probably around £350,000. Most banks would have been very cautious to lend such a high multiple, even before the credit crunch set in. Northern Rock had no such qualms.

Stella I imagine Branson wants NR as they would be at a massively reduced price given all the problems they have had. They must have a big customer list so lots of potential new business opportunities for him.

by Guest 13.12.11 15:33

uppatoffee wrote:Pershing, this would be my guess at why the McCanns used Northern Rock for their mortgages.

They paid £459,950 for their house back in January 2006. At the time they had three children so Kate and according to the background information on her provided by Leicester Police she was still on Maternity leave at the time (even at May 2008 this listed as being the case). This is well beyond the normal time so she would not be earning much, if anything. This would have left Gerry's £75k salary. Normally mortgage companies will only loan an income multiple of 4x. Meaning that they would only be able to borrow £300,000. Many people used Northern Rock as they offered much higher multiples than normal banks/buildings societies. By May 2008 we know that their mortgage was £323,493, and this is after nearly two and half years of repaying around £2,000 a month. Therefore they must have needed a considerably higher amount to start with, probably around £350,000. Most banks would have been very cautious to lend such a high multiple, even before the credit crunch set in. Northern Rock had no such qualms.

Stella I imagine Branson wants NR as they would be at a massively reduced price given all the problems they have had. They must have a big customer list so lots of potential new business opportunities for him.

Other banks did the same many were lending 110 per cent and more not just Northern Rock. We can't really speculate on how much was borrowed or salaries etc., because we simply do not know the facts.

by Pershing36 13.12.11 20:12

We can't dispute that Northern Rock was not the worst of the bunch. They were the first to need a bail out after a near on collapse. Remember all those queues for people trying to get their money out?

I am not speculating on anyone's money matters, however it has been suggested in other posts that money could have been a pre-2007 problem. I am sure if I was in the know with very high up business friends, I would have been worried about Northern Rocks problems well before it became public knowledge. Some people would have got this knowledge well before there was any guarantee the Government would throw billions of pounds at it.

If the bank had collapsed many would have been left with mortgages no other bank would have touched with a barge pole.

Just to add something with Richard Branson. It appears he wont pay a penny for it.

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