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B&b Mortgage Book Implodes

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http://www.thisismoney.co.uk/news/article....=moretopstories

Struggling buy-to-let landlords have helped push the proportion of borrowers in arrears at nationalised bank Bradford & Bingley to one in 20, the state-owned bank has revealed.

The figures show around 15,000 are more than three months in arrears, with the lender warning this will rise even further.

Bradford & Bingley's mortgage book was nationalised following its collapse last year, while its savings arm was bought by Spanish company Santander.

One of the reasons for its downfall was its acquisition of billions of riskier loans from other companies, including subprime lender Kensington and US financial giant GMAC.

Many of the loans would not have met the lender's own criteria, with fewer checks made on whether borrowers could afford the repayments.

Yesterday Richard Pym, chairman of Bradford & Bingley, said the proportion of borrowers defaulting on their payments had worsened since March, when its arrears rate was 4.6%.

Pym estimated the loan losses this year to be between £600m £700m as thousands more amateur buy-to-let landlords and self-certified borrowers experience financial difficulties.

The lender is set to borrow billions of pounds from the Government as its wholesale loans from the private sector mature at a faster rate than its mortgages are being paid back, creating a widening shortfall in the working capital.

'It's now above 5% and it will continue to deteriorate for the remainder of the year,' he said. The figure has more than doubled in a year and is far higher than the 2.39% industry average.

Northern Rock has seen its arrears rate rise from 0.95% last April to 3.67% this year. But it blames the rising rate mainly on the credit crunch, with increasing numbers of families struggling with unemployment and a drop in income due to pay freezes. It said its arrears figures had also worsened as it had been rapidly shrinking the size of its mortgage book.

Other lenders are doing far better. Abbey and Alliance & Leicester, which were bought by Santander, have an arrears rate of 1.13%, while figures for Lloyds TSB and HBOS are 'below the industry average'.

Oh well tax payer will pick up the tab. Hmm but is BTL dead?

RMBS update here: http://www.mortgagestrategy.co.uk/cgi-bin/...h=401&f=402

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BTL landlords struggling ?

Must be a shortage of tenants, due to the massive number who have recently decided to buy !

:lol::lol::lol:

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Don`t you start !

;)

He's quite right, you know, after the Olympics most of the 30 million participants will spontaneously decide to settle in Stratford.

Luckily, half of them will end up in Stratford-upon-Avon by mistake.

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BTL landlords struggling ?

Must be a shortage of tenants, due to the massive number who have recently decided to buy !

:lol::lol::lol:

How does that work, there are finite number of houses in the UK, renters become buyers, the seller either becomes another buyer or a renter, (of course there are deaths for sale reasons so they are removed from the equation but equally the same number of young enter the market) its a merry-go-round.

You should really engage brain and think a little bit, this stuff aint hard really! ;)

Edited by Jimmy2Times

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How does that work, there are finite number of houses in the UK, renters become buyers, the seller either becomes another buyer or a renter, (of course there are deaths for sale reasons so they are removed from the equation but equally the same number of young enter the market) its a merry-go-round.

You should really engage brain and think a little bit, this stuff aint hard really! ;)

:lol::lol::lol:

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He's quite right, you know, after the Olympics most of the 30 million participants will spontaneously decide to settle in Stratford.

Luckily, half of them will end up in Stratford-upon-Avon by mistake.

They`re welcome to it.

To buy, or not to buy, that is the question.

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BTL landlords struggling ?

Must be a shortage of tenants, due to the massive number who have recently decided to buy !

:lol::lol::lol:

Come on now Prof, play fair.

We all know there is a massive shortage of property, and with the population destined to hit 75m in 2020 it is simply impossible that these landlords cannot get tennants who are willing to pay £1000 per month for a 2 bed flat in Salford.

Honestly, go away and rethink your maths until the numbers work properly :P

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BTL landlords struggling ?

Definately , 1000's and 1000's of amateur landlords wishing they had never got involved with BTL ....to late now though for these suckers :)

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How does that work, there are finite number of houses in the UK, renters become buyers, the seller either becomes another buyer or a renter, (of course there are deaths for sale reasons so they are removed from the equation but equally the same number of young enter the market) its a merry-go-round.

You should really engage brain and think a little bit, this stuff aint hard really! ;)

Obviously, sarcasm (although the lowest form of wit) is too hard for you. My brain was indeed engaged when I typed that post. I rather hoped someone would be clever enough the "get" the joke.

And what on earth are you going on about merry-go-rounds for ? Do an equal number of young enter the property market as those that "leave" ? I suspect that particular ratio varies somewhat. I also suspect that you don`t have the figures to back up your statement.

Why did you patronise me ? You`re not one of the struggling landlords are you ? If you are, what a shame.

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Your link should have a thread of its own (perhaps it does but it's late and I'm peessed...)

The level of arrears relating to residential mortgage-backed securities continues to escalate as Moody's Investor Services charts a quarterly increase in arrears since 2007.
Northern Rock’s Granite master trust has been picked out as particularly poor-performing, with the rate of arrears of over 90 days going from 3.36% in Q1 2008 to 4.32%.

Moody’s has called the rate of increase “substantial†and adds that the index is recording three-month arrears on a par with Bank of Scotland’s Mound master trust, which has gone from a balance of 3.7% to 4.53% over the last year.

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Come on now Prof, play fair.

We all know there is a massive shortage of property, and with the population destined to hit 75m in 2020 it is simply impossible that these landlords cannot get tennants who are willing to pay £1000 per month for a 2 bed flat in Salford.

Honestly, go away and rethink your maths until the numbers work properly :P

Don`t you start !

;)

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Hahahaah! The bears are really picking at straws now - This ones titled "BBs Mortgage book implodes - end of the world! Game over!"

Then you open it and its actaully tittled "B&B feels heat as 5% of borrowers default". 5% WOW! I know these banks took risks but 5% of loans going bad is stuff all! That means 95% of loans are good. :lol::P:lol::P:lol::P:lol::P

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Come on now Prof, play fair.

We all know there is a massive shortage of property, and with the population destined to hit 75m in 2020 it is simply impossible that these landlords cannot get tennants who are willing to pay £1000 per month for a 2 bed flat in Salford.

Reminder: massive growth in population of an already hugely overcrowded island due entirely to immigration and high birth-rates among Muslim and other alien ethnic groups.

You can use your vote wisely tomorrow, or not... but with each election that passes the chance to due something radical to stop the trends declines.

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Hahahaah! The bears are really picking at straws now - This ones titled "BBs Mortgage book implodes - end of the world! Game over!"

Then you open it and its actaully tittled "B&B feels heat as 5% of borrowers default". 5% WOW! I know these banks took risks but 5% of loans going bad is stuff all! That means 95% of loans are good. :lol::P:lol::P:lol::P:lol::P

But what happens if the rest of the 95% also defaulted? (Apart from lots of red letters being posted and the post office making some money) how many months of total defaults would it take for a bank to collapse because of that?

Wonder if a targeted and organised mass 'defaulting' of selected banks could put them under, and what effect that would have on the economy/property prices as a whole?

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Hahahaah! The bears are really picking at straws now - This ones titled "BBs Mortgage book implodes - end of the world! Game over!"

Then you open it and its actaully tittled "B&B feels heat as 5% of borrowers default". 5% WOW! I know these banks took risks but 5% of loans going bad is stuff all! That means 95% of loans are good. :lol::P:lol::P:lol::P:lol::P

The number behind with mortgage payments, and hence eventual defaults is RISING! Even with rates at 0.5%.

Cmon, you know you can work out the next bit.......

:P:(

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But what happens if the rest of the 95% also defaulted? (Apart from lots of red letters being posted and the post office making some money) how many months of total defaults would it take for a bank to collapse because of that?

Wonder if a targeted and organised mass 'defaulting' of selected banks could put them under, and what effect that would have on the economy/property prices as a whole?

Shallowthinker indeed.

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But what happens if the rest of the 95% also defaulted? (Apart from lots of red letters being posted and the post office making some money) how many months of total defaults would it take for a bank to collapse because of that?

Wonder if a targeted and organised mass 'defaulting' of selected banks could put them under, and what effect that would have on the economy/property prices as a whole?

But, but, but, but, havent you noticed, news and sentiment is getting better all the time. Bank dont go broke in the UK or havent you noticed that either.

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Oh dear. How shallow.

This news is hardly "picking at straws". It might be "only" 5% of borrowers in arrears, but it`s higher than the industry average, and its getting worse. (Did you actually bother top read the article ?)

"It's now above 5% and it will continue to deteriorate for the remainder of the year,' he said. The figure has more than doubled in a year and is far higher than the 2.39% industry average."

You`re "new" here, aren`t you ? Well be a good chap and try a bit harder. I`ve noticed that you`ve "battled" with one or two longer term members on this forum, and you haven`t made a very good first impression.

Many people here, including myself, predicted the demise of Bradford and Bingley, well before the media and the public were aware of it`s precarious situation. I`d say that gives us some authority to comment on this type of story.

Bears picking at straws ? Look at the joyous celebrations that take place amongst the bulls when we have one or two months of house price rises.

Its called a debate, not a battle. Comment all you like, believe it or not people actually have opposing views to you guys.

House prices in general dont really concern me. Its the broader economy I what I wish to see doing well again.

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most banks ARE broke, they are zombies supported by our tax....now frack off back to New York cos people like you caused the crisis over here in the UK dontchaknow....we dont need you primary causers upsetting our applecart any more.

Im English, living in NY. Im well aware banks are on a govt splint at the moment, the point I was making is they are not allowed to fail.

Dont try and get all hero on me toilet cleaner. Your doom and gloom apple cart is on fire. :lol:

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Hahahaah! The bears are really picking at straws now - This ones titled "BBs Mortgage book implodes - end of the world! Game over!"

Then you open it and its actaully tittled "B&B feels heat as 5% of borrowers default". 5% WOW! I know these banks took risks but 5% of loans going bad is stuff all! That means 95% of loans are good. :lol::P:lol::P:lol::P:lol::P

ok 95% of loans at 2.99% = about 3% of the capital is returned.

deduct the 5% of capital that is now needing to be offset as potential write off, and we see a loss of 2% and a further set aside of vital capital.

call your yourself a bull, you have no idea.

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