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Northern Rock Admits It Is Moving Into The Sub-prime Market

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"We also expect to see house price inflation slow in the second half of 2006 and over the medium term be in line with increases in earnings," the bank added.
Northern Rock is also due to start offering loans to sub prime customers, for the first time
, via a new joint venture with Lehman Brothers (NYSE: LEH - news) . The group said it would earn fee income but would not take any credit risk.

What, not enough people with good credit to keep their shares up? :lol:

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See the Telegraph article today (other thread) about the collapse in ratings of "sub-prime" lending. Impeccable timing by Northern Rock - they may enter the sub-prime market but the prices of the bonds they will issue will be much higher now that the ratings on other sub-primes has been hit. I do not see that they will be offering very competitive rates!

Interesting decsion - I can see the board presentation now: "we don't earn enough money from mainstream mortgages as the margins are to thin, lets get into this sub-prime lark where the margins are 1% higher. We can securitise the debt and take no risk but skim off fat fees. But, isn't the bottom falling out of that market and credit ratings being slashed? Shut up."

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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