Monday, Feb 23, 2009
Scandalous!!!!!
The Times: Northern Rock to pay bonuses despite £1.4bn loss
"Northern Rock crashed to a £1.4 billion loss in 2008, the state-owned bank revealed today and warned that the number of mortgage customers getting into difficulties was rocketing.
But senior staff regarded as essential to the company's future will still receive bonuses for the year, it said."..........If you have the right job you can get away with anything
Posted by titaniccaptain @ 04:50 PM (763 views) Add Comment
9 Comments
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1. stillthinking said...
Probably a really long while ago, as I can't remember when, I put a few comments about how the UK seems to be moving to an unfair version of socialism, with all the attendant poverty. NR employees and many bank employees are being slotted in to regime/government pay schemes.
The government have accepted yet more non-producers on the payroll, at a higher salary. This will of course end.
2. cyril said...
For years the public sector has been the poor relation, but as soon as the private sector goes t!ts up, everyone starts moaning about bureaucrats with gold plated pensions. We've heard all that free market drivel for years, now we can have a dose of state socialism for a change.
3. Eternal Sceptic said...
Words simply escape me. How can senior staff be regarded as essential when it was their deeply flawed business model that bankrupted the company. Theworld has gone mad, Productivity is rewarded with dismissal and failure rewarded by paying a bonus. This is akin to taking a cruise on the Titanic.
4. enuii said...
Quantative easing via the paypacket, looks like Cyril is all for it!
P.S. Don't forget that the Treasury will get nearly 50% of it as cash back!
5. quiet guy said...
Can anybody explain to me what characteristic of the mortgage lending business is so difficult that you need to be a highly paid genius to do it? I am tyring to keep an open mind and would be particularly interested in any contributions from readers with experience of this business. After all, if a company that made a £1,400,000,000 loss can still pay bonuses then the skills of those who get the bonuses must be quite special?
6. jack c said...
@quiet guy - I work in the industry (not the main part of my business at the moment admittedly) - the advice side of the process is regulated and you need to hold appropriate qualifications. The mortgage lending side of the business which is the bit you are questioning isnt as complicated (IMO) as is perhaps made out (which is the point I think you are driving at). Assuming the business is set up correctly with a sensible funding strategy combined with a volume and profitability mix a lending criteria can then be set and released to the public direct or via intermediaries or a combination of the two. If the applicants meet the criteria a competant underwriting team can then either approve or decline the applications. All applicants who do not meet the standard lender criteria can simply be declined (computer says no springs to mind) As a safeguard to the business risk controls need to be in place to keep a lid on fraud.
Here is C&G's latest BTL critria - so people viewing this message could see if they meet it or not (info correct as at 19/02/2009)
Applicants must be earning at least £35,000pa (joint or sole) from employment/self-employment (not rentals) & you must be able to evidence this to a payslip or Accountants reference.
· Max ltv 75% (new build 65%).
· Rental coverage required; 120% of payrate.
· Simple underwriting on up to 3 cases per applicant (max £500k).
· Free legals on straight forward re-mortgages (and unencumbered loans) over £50,000 (some exclusion, please check).
· Free valuation on ALL re-mortgage & unencumbered applications.
· Up to 70% ltv no rental valuation done; rent confirmed to tenancy agreement or letting agents rental assessment. Over 70% ltv, professional rental valuation carried out.
· No re-furb properties. No re-mortgages within 6 months of purchase.
· Full product details attached.
· Ring me to discuss applicants with larger portfolios prior to submission.
· Rates from 4.59%.
7. quiet guy said...
@jack c
Thank you very much for your response. Too be honest, I'm not sure what to make of it. Call me a thicko if you like, but the 'computer says ...' appears to be a large part of the process - that is my personal experience with mortgage advisors.
8. Agentimmo said...
To Quietguy :
The front desk people you see at a bank/building society don't need a degree to sell you a mortgage. Lots of these client / mortgage advisors have "worked their way up" with the bank to these positions. They need a simple banking certificate to say they are apt to sell. Not hard to gain at all. Most of the calculations are done by computer programs. The sellers simply type in all the relevant info. Their main job is to be a kind face to the mortgage requestor and to entice/help them to take on the mortgage. This is NOT a skilled job. Once all details are in the system, the program sends it higher up the ladder to some back-office people who assess in more detail the application. It is this team who ultimately decide if the mortgage gets a green light. In some cases , the local advisor or team leader can add his opinion if there are special circumstances (eg. borrower is self employed, waiting for an inheritance etc...)
These people do NOT need a bonus to function. How do I know ? Well, I've a very good friend at a local bank who has received no bonus or pay rise for 3 years and is still doing the job very well......
Really, all the banks need to do is change the parameters of the computer programs to accept no more than 3 times earnings plus a 20% deposit and the problem is solved. Sheesh...it is NOT rocket science. !!!!
9. jack c said...
@quiet guy - you are clearly not a thicko - you have worked it out for yourself ie it aint really that complicated ! for example brokers can input client info online via BM Solutions and all will be processed electronically (including valuation) and if all stacks up the offer letter will come back within 20 mins electronically - essence of the tale "computer says YES" or "computer says NO"