Friday, Sep 28, 2007
6X Salary or 125% its Business as Usual for Sub-Prime UK
Guardian: Northern Rock refuses to tighten lending rules
The desperate rock continues to offer sub-prime loans in a desperate bid to keep mortgage business coming in yet is struggling to win new mortgage business.
Posted by enuii @ 07:49 PM (1037 views) Add Comment
14 Comments
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1. whiteknight said...
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
No behaviour change = Business as usual = This is about to be a 3 changes of underwear trip very shortly.
(Churchill and Red Dwarf in the same quote .. what more do you want?)
2. crash bandicoot said...
So you can have a 6x mortgage if you earn £100000 or more. It must be nice sitting in your £600k house, drinking white cider like a council estate chav because you are too skint to go out. It perhaps won't be so nice when it's worth £500k. At least you'll still have the cider.
3. planning4acrash said...
6x mortgage? lie and its 8%plus.
At 6x salary, you pay over 30% of your income on mortgage on a 6% IR, take another 40% for tax and national insurance and you are left with just 20%, i.e. 20k for EVERYTHING else!! So you'd have to MEW for a car or holiday, to decorate or replace the boiler, but what if you get hit with another 2% or lied and have taken out 8%?!?!?!?! Creeks and paddles come to mind!
4. sara said...
Merv said bailing out banks would send the wrong signals to the rest of the industry. Apparently it sends the wrong signal to the one it bails out too.
Surely it doesn't matter whether you lend to subprime people or not, if you're taking too much of their overall wage, then there is only one outcome.
P4aC - I agree with you. Plus I think if people earn more they have higher expectations of the lifestytle they should live and load up with other debts accordingly.
5. autopilotengage said...
Yes, and add to that squeeze the forthcoming rise in petrol tax, 90$ oil, returning inflation if the BOE is stupid enough to be bulldozed into lowering rates again, the increases in tax needed to fund the still increasing public spend, etc. and that 20% soon gets spent. Oh dear. I'm also wondering how the government is plugging the massive decrease in take since nearly everyone has quit smoking or is trying to quit since the public smoking ban; anyone know anything about that?
6. holding out said...
It is effectively being subsidised to promote these ridiculous loans. If a business can't sustain itself it has to raise it's prices. If that means that more lenders have to go elsewhere then so be it.
7. paul said...
The Northern Rock MD Adam Applegarth was heard to exclaim:
"Wayzinna pickle, the big boys bail youz oot - fooking marvellous times reet?"
8. paul said...
"Some experts said it could be expected to breach the £10bn barrier within days"
"Iz free mooney innit? Get tha tinnies in lads"
9. bearshare1616 said...
This is the beginning of the long slippery slope for Northern Rock, just like Barings Bank where Nick Leeson gambled bigger and with more risk to try and reclaim losses and we all now the outcome of that story !!
10. The Baldman said...
Beyond belief. Perhaps they can find the management jobs in local government after the bank has collapsed where they can waste our mony.
11. lvmreader said...
They should have waited for Barclays to fail - that really will need "bailing out".
Now they have "spent" all that money. If they continue printing money, the GBP will sink like a rock and even Joe Average will cotton on to the GIGANTIC con that is the banking system.
That's right - there is no such thing as money exactly. There are representations of work done / goods produced by people but only if sovereign nations don't cheat by "printing" more of their own currency.
Idi Amin (Dictator of Uganda) used to do this. His Finance Minister would tell him that there was no more money. He would retort explosively "Well print some more"
12. autopilotengage said...
Since their brand has now been completely trashed, i suggest a new one. How about "Northern house of cards"?
13. autopilotengage said...
Sorry, make that "Northern hoose of cards" (like).
14. sirgoogle said...
Who oversees the share holdings and sources of wealth of the BoE committee?
I bet that some of them have shares or directorships in some of the dodgy services that they are meant to be independently monitoring. I bet that they have also been promised directorships if they make certain voting patterns.
This type of information should be on display for all