Monday, Jun 01, 2009
State-owned Bradford & Bingley
Times: Bradford & Bingley counts £700m cost as 5% of borrowers default on mortgages
B&B, which has borrowed more than £20 billion from the Government so far, is set to borrow billions more because its wholesale loans from the private sector are maturing much faster than its mortgages are being paid back, creating a widening working capital shortfall.
Posted by devo @ 12:30 AM (751 views) Add Comment
6 Comments
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1. little professor said...
What a difference two years makes:
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article1698928.ece
2. quiet guy said...
"estimated that loan losses this year would be between £600 million and £700 million, up from £500 million last year, as thousands more amateur buy-to-let landlords and self-certified borrowers get into difficulties."
"Buy-to-let borrowers are in no hurry to pay back mortgages because, under deals struck before the credit crunch, most of them have reverted to an attractive tracker interest rate of base rate plus 1.75 per cent, which is at present only 2.25 per cent."
So if these 'amateur' borrowers and 'self-certified' liars are in trouble now, what happens if rates go back up to historical norms?
3. mark wadsworth said...
@ QG, that is why the gummint (and the next Tory one) will do their best to make sure that mortgage interest rates (for existing borrowers at least) stay as low as they are now for as long as poss.
Everything else can go through the roof - credit cards, business borrowing, gilt yields and so on, but nothing may ever affect The Hallowed Homeowner.
4. Hermitage said...
Can anyone explain this passage - "B&B pays no interest on the bulk of its borrowings from the Government and the FSCS. " I always thought these institutions were being charged something like 12%
5. stillthinking said...
Something that doesn't seem to be shown up on the media for the UK, but seems well flagged as a problem in the US i.e. the bundled mortgages which were sold, need to be rolled over at some point don't they? I mean, mortgages were created and funded internationally, but were they sold for the entire term in the UK? Doesn't this debt need to be rolled over as in the US?
So as the market is still collapsed with good ongoing reasons for being in that state, wouldn't that mean that the UK banks main shock is going to move from anticipatory to real around about now.
6. mander said...
The comedy club mentioned: The taxpayer will be fully repaid. So the taxpayer intrest is to make sure they loan thier money to investors so they can rent for the rest of their life.