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spyguy

Nationsnide

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Just seem the new NW ad.

Northern woman, talking about loyalty.

Now NW are a southern.

And theyve spent the last 10-15 years lending to BTL LLs. 

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24 minutes ago, spyguy said:

Just seem the new NW ad.

Northern woman, talking about loyalty.

Now NW are a southern.

And theyve spent the last 10-15 years lending to Southern BTL LLs. 

Like any good mutual should.Why shouldn't the 1% feel the benefits of mutual love.

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I've been a nationwide customer for about 30 years and after a few experiences with mystery credit card charges that they couldn't explain but agreed to take them off my account anyway.  I have decided to take a large proportion of the cash i have with them and buy premium bonds whilst moving the rest to other savings accounts. They bang on about loyalty and yet they have been useless whenever I've had any recent dealings with them. The best loyalty saver about pays less than I can get elsewhere.

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So basically her gran wanted to pretend to be loyal to the local shop while actually shopping elsewhere. What a heartwarming tale of geriatric deception.

Edited by Dorkins

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1 minute ago, Dorkins said:

So basically her gran wanted to pretend to be loyal to the local shop while actually shopping elsewhere.

Agree it just doesn't make any sense.  Are they saying that NW are disloyal but they are mildly embarrassed about it?  

Also, their reward is the opposite of loyalty. Fixed 5% interest for new customers for 1 year, 1% afterwards.

Is this advert a hidden admission of screwing over their long term customers by loss leader strategies?

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Is the lady in the advert the target age group for their first time buyers mortgages?  Should be about the right age range for saving up a deposit after paying rent all those years.

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6 hours ago, hotairmail said:

Nationwide - a disgustingly cynical organisation playing up its 'mutuality' as though it means something to them.

Helping price you and your kids out of ever buying a home for decades as they'd rather lend to landlords because they are 'lower risk'.

Focking tw@ts, what is the point of a mutual that doesn't even build homes, just pumps credit into the existing housing stock and hands the keys to a BTL landlord.

 

Woogh there!

Lending to LLs as their dumb as fck models reckons that LL are a lower risk than OO.

Total BS. LL lending is commerical lending, which is much higher risk than a 80% LTV OO repayment.

IO BTL is beyond fcked up and is no different to a commercial bridging loan - which norally attract IRs well north of 10%

 

NW model - fewer LL than OO are in default than OO. Errs thats because youve never let to LL before and its IO lending where the risk sits on our books forever you stupid twt@ts. IO BTL is very risky property speculation.

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1 hour ago, spyguy said:

Woogh there!

Lending to LLs as their dumb as fck models reckons that LL are a lower risk than OO.

Total BS. LL lending is commerical lending, which is much higher risk than a 80% LTV OO repayment.

IO BTL is beyond fcked up and is no different to a commercial bridging loan - which norally attract IRs well north of 10%

 

NW model - fewer LL than OO are in default than OO. Errs thats because youve never let to LL before and its IO lending where the risk sits on our books forever you stupid twt@ts. IO BTL is very risky property speculation.

From 2011:

 

http://citywire.co.uk/money/why-nationwide-prefers-buy-to-let-landlords-to-first-time-buyers/a489252

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3 hours ago, spyguy said:

Woogh there!

Lending to LLs as their dumb as fck models reckons that LL are a lower risk than OO.

Total BS. LL lending is commerical lending, which is much higher risk than a 80% LTV OO repayment.

IO BTL is beyond fcked up and is no different to a commercial bridging loan - which norally attract IRs well north of 10%

 

NW model - fewer LL than OO are in default than OO. Errs thats because youve never let to LL before and its IO lending where the risk sits on our books forever you stupid twt@ts. IO BTL is very risky property speculation.

Would that not take into account going after equity at the primary residence e.g the BTL's main home(s) / assets  ? I really can't see NW going after that so expect it'll eventually end up in some special purpose vehicle. 

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45 minutes ago, Ash4781 said:

Would that not take into account going after equity at the primary residence e.g the BTL's main home(s) / assets  ? I really can't see NW going after that so expect it'll eventually end up in some special purpose vehicle. 

Another Wooh!

NW problem is if its been lending morethan than they could recover from from LLs OO.

Yes, the NW *will* go after any equity and/or asset it can if there is a shortfall.

NW is a mutual. Its ability to raise new capital is very restricted.

Its also the reason why any mural should not be lending non amortising commercial loans.

The mutual model worked as it was low risk - someone saves with a mutual to raise their 10-20% deposit. This slone demonstrates that the saver is probably a good risk. The saver then takes out a 20/25 year mortgage, paying off ~1/20 year. NW risk after 10 years will be much less tha then 50%   equity.

Total different ball age with IO BTL loans. Again, any non amortising loan is very risky and should not be issued by a bank, never mind a mutual.

And commercial loans are about 3-4 the risk of an 80% LTV OO loan.

 

NW should *not* not be in the BTL market at all.

 

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1 hour ago, hotairmail said:

Not any more. In a special deal where they 'kept lending into the economy' (ie pumping credit into housing market anyway they could....ie landlords), they got the law changed so they could raise capital on the money markets.

 

http://www.reuters.com/article/nationwide-capital-idUSL6N0M12C420140304

 

Mutual no more....answerable to bond holders who will withdraw support if they don't do what they say.

 

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9290401/Nationwide-Building-Society-strikes-deal-with-FSA-over-capital.html

Yeeees.......

Hardly loss absorbing equity, is it?

Bit like Leeds Utd ~10 years ago - Were saved! Its Ken Bates.

 

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18 hours ago, Dorkins said:

So basically her gran wanted to pretend to be loyal to the local shop while actually shopping elsewhere. What a heartwarming tale of geriatric deception.

:lol:

Nailed it.

The moral of the story seems to be that loyalty is about pretence. That fits the Nationwide board to a T. Obviously they want massive salaries, hence they go nuts for the buy-to-let, but they don't want to seem disloyal to their customers so they make sure all the BTL lending is intermediary-only and through a company which doesn't carry the Nationwide name.

 

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6 hours ago, hotairmail said:

Mutual no more....answerable to bond holders who will withdraw support if they don't do what they say.

I think that line of argument is sufficiently tendentious that one might want to say it was actually wrong.

The financial instrument (Core Capital Deferred Share)  is never rolled over (hence "perpetual" as per your link).

Quote

Redemption: The CCDS constitute permanent non-withdrawable deferred shares and have no maturity date. The Society has neither an obligation nor any right to redeem or, save following a purchase as referred to in “Purchases” below, cancel the CCDS and the CCDS holders do not have any right to require the Society to redeem, purchase or cancel the CCDS.

Purchases: The Society may, at any time, subject to the consent of or nonobjection from the PRA if then required, purchase CCDS in the open market or otherwise at any price. CCDS so purchased may, at the option of the Society, be held, re-issued and/or re-sold or surrendered to the registrar for cancellation

Source (emphasis as per Nationwide CCDS prospectus)

One of the main mechanisms that gives bondholders leverage over their debtors is that in a crisis the debtor may not be able to raise the cash needed to redeem a bond which comes up for redemption. When circumstances conspire in this way the borrower is at the mercy of the bondholders who can force the borrower into administration, hence stepping in front of the equity owners when it comes to getting paid off and also removing the existing management (when the administrators clear out the old executives).

This CCDS instrument has a real mix of debt and equity character and I agree with your assessment that Nationwide is no longer as (notionally) mutual, in terms of its balance sheet, as it was before it issued these CCDS but I don't buy the idea that the people who bought these CCDS will ever end up holding any power over the Nationwide board.

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11 hours ago, hotairmail said:

Indeed, that was what I was referring to.

 

 

342104-System__Resources__Image-356923.j

and they send voting papers around now, ummm which guy wouldn't you vote for?  turn it around which would I?  I'd bet they're all the same.

This is the kind of c*** that reveals what utter scumbags these people in albeit small, positions of power.  After meeting boss after boss with exactly the same kind of attutude who are roughly the same age (by picture), I'm convinced its more a generational thing.

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22 hours ago, hotairmail said:

Helping price you and your kids out of ever buying a home for decades as they'd rather lend to landlords because they are 'lower risk'.

I keep reading this IO BTL is "higher risk" and I don't get it.  Its high risk to the BTLer not the bank.

At the end of the IO term the bank still owns the property (at whatever value it is at the time).  The bank has collected interest for the entire sum the whole time and every payment made them some profit.  Its better than a maxed out credit card with preferential interest rate, as this is technically unsecured.

The party that is trying to be the property owner then effectively gets an option to buy at the original price 25 years ago.  Or presumably the bank gets to keep the property and charge the would be property owner a load of fees on top around the mess they are in.

Doesn't history state the property will hold or better its value over this term ?

Yes it might be a 95% LTV at the end of 25 years (unlikely as right now they roll over their mortgage deal, try to improve their LTV, but pay some more fees), once interest has been paid for 9 years (3 lots of 3 year fixes) the bank no longer has any significant risk.

This does kind of presume the bank did something useful with the money, not gamble it out again on new risk.

So the issue is; if IO doesn't make it to full term.

Like musical chairs, as loans stop being created money stop entering the "economy" and stops making its way back to banks in the form of interest payments.  Some group of people have to lose out; but such an opportunity will be controlled and be done in a way that money will still be made by the bank.

It's kind of clear that the BTL will be the scapegoat not the OOer.   As I say the whole scenario is high risk to the BTLer not the bank.  As I understand it the banks can't use as collateral the mortgage contracts they hold and the future intent to receive interest payments from them as a basis of new lending, only the interest payments they have actually received already.  Which means when things go sour they are writing off profits they have not yet received.  The number might look big on the day but in the grand scheme of things they are still making net profit.

 

 

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3 minutes ago, Odin said:

 

I keep reading this IO BTL is "higher risk" and I don't get it.  Its high risk to the BTLer not the bank.

At the end of the IO term the bank still owns the property (at whatever value it is at the time).  The bank has collected interest for the entire sum the whole time and every payment made them some profit.  Its better than a maxed out credit card with preferential interest rate, as this is technically unsecured.

The party that is trying to be the property owner then effectively gets an option to buy at the original price 25 years ago.  Or presumably the bank gets to keep the property and charge the would be property owner a load of fees on top around the mess they are in.

Doesn't history state the property will hold or better its value over this term ?

Yes it might be a 95% LTV at the end of 25 years (unlikely as right now they roll over their mortgage deal, try to improve their LTV, but pay some more fees), once interest has been paid for 9 years (3 lots of 3 year fixes) the bank no longer has any significant risk.

This does kind of presume the bank did something useful with the money, not gamble it out again on new risk.

So the issue is; if IO doesn't make it to full term.

Like musical chairs, as loans stop being created money stop entering the "economy" and stops making its way back to banks in the form of interest payments.  Some group of people have to lose out; but such an opportunity will be controlled and be done in a way that money will still be made by the bank.

It's kind of clear that the BTL will be the scapegoat not the OOer.   As I say the whole scenario is high risk to the BTLer not the bank.  As I understand it the banks can't use as collateral the mortgage contracts they hold and the future intent to receive interest payments from them as a basis of new lending, only the interest payments they have actually received already.  Which means when things go sour they are writing off profits they have not yet received.  The number might look big on the day but in the grand scheme of things they are still making net profit.

 

 

This is the sub-prime thinking personified. Think systemically...

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5 minutes ago, LittlePig said:

This is the sub-prime thinking personified. Think systemically...

Systemically the computer says this is the fastest way to earn the most in the shortest time (for the banks).

We see threads (on this forum) on how AI + robots will replace labour (from the viewpoint of gawd help the workers), I say financial services do not require much labour to manage, are highly optimized for AI + robots, I say the financial institutions are already running numbers (worldwide) and the computer says this is the fastest way to the end game goal that was set.

AI + robots are not on their way, they are already here in the world of money, where the rewards for such small amounts of real labour are so large for so few.

So the question is if that is already here, some one think though the models on every competing nation doing this and the possible outcomes.

This deserves a thread in on its own right.

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8 hours ago, Odin said:

 

I keep reading this IO BTL is "higher risk" and I don't get it.  Its high risk to the BTLer not the bank.

At the end of the IO term the bank still owns the property (at whatever value it is at the time).  The bank has collected interest for the entire sum the whole time and every payment made them some profit.  Its better than a maxed out credit card with preferential interest rate, as this is technically unsecured.

The party that is trying to be the property owner then effectively gets an option to buy at the original price 25 years ago.  Or presumably the bank gets to keep the property and charge the would be property owner a load of fees on top around the mess they are in.

Doesn't history state the property will hold or better its value over this term ?

Yes it might be a 95% LTV at the end of 25 years (unlikely as right now they roll over their mortgage deal, try to improve their LTV, but pay some more fees), once interest has been paid for 9 years (3 lots of 3 year fixes) the bank no longer has any significant risk.

This does kind of presume the bank did something useful with the money, not gamble it out again on new risk.

So the issue is; if IO doesn't make it to full term.

Like musical chairs, as loans stop being created money stop entering the "economy" and stops making its way back to banks in the form of interest payments.  Some group of people have to lose out; but such an opportunity will be controlled and be done in a way that money will still be made by the bank.

It's kind of clear that the BTL will be the scapegoat not the OOer.   As I say the whole scenario is high risk to the BTLer not the bank.  As I understand it the banks can't use as collateral the mortgage contracts they hold and the future intent to receive interest payments from them as a basis of new lending, only the interest payments they have actually received already.  Which means when things go sour they are writing off profits they have not yet received.  The number might look big on the day but in the grand scheme of things they are still making net profit.

 

 

History shows that over a medium term, most property falls down.

IO is pure speculation based on property values. As ar as the bank getting its money back .. . they dont know til th end of the 25 IO term. Then the LL has to stump on the money, or the bank will have to repo. In the latter case the bank might turn up and find that nice new bild in Doncaster has been occupied by scum and is now condmened and needs knokcing down.

Then the bank needs to recover its money. Fine if the LL has assets then cover the debt. But what about the likes of Fergus? Or even a protfolio LL with 5 BTL?

 

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53 minutes ago, spyguy said:

History shows that over a medium term, most property falls down.

IO is pure speculation based on property values. As ar as the bank getting its money back .. . they dont know til th end of the 25 IO term. Then the LL has to stump on the money, or the bank will have to repo. In the latter case the bank might turn up and find that nice new bild in Doncaster has been occupied by scum and is now condmened and needs knokcing down.

Then the bank needs to recover its money. Fine if the LL has assets then cover the debt. But what about the likes of Fergus? Or even a protfolio LL with 5 BTL?

 

But it is impossible for properties to loose their value all at once! 2007-2009 never happened. No sir, it was a myth and it's all better now anyway.

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With a 25Y IO BTL mortgage you are not talking a house going in a flash.

Rather that changes to house pries over a long time.

http://www.gazettelive.co.uk/news/teesside-news/regeneration-gresham-middlesbrough-should-progressed-7015302

There are people living here who have houses worth less than they paid for them 20 years ago.

40 years ago, boro had one of the highest household incomes in the UK.

Ditto places like Wakefield.

 

 

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