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Disclaimer: This is from an overheard drunken City conversation, and take it with the appropriate caution.

Apparently there has been a massive interest rate swap (or swaps) that UBS has done for Northern Rock about three years ago which they have not reported in their quarterly results. They are sitting on enormous losses and they are absolutely petrified of the due dilligence from JC Flowers. UBS are not the prime brokers, and whoever are the prime brokers may be in even more trouble.

Purely anecdotal, but you heard it here first.

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Disclaimer: This is from an overheard drunken City conversation, and take it with the appropriate caution.

Apparently there has been a massive interest rate swap (or swaps) that UBS has done for Northern Rock about three years ago which they have not reported in their quarterly results. They are sitting on enormous losses and they are absolutely petrified of the due dilligence from JC Flowers. UBS are not the prime brokers, and whoever are the prime brokers may be in even more trouble.

Purely anecdotal, but you heard it here first.

....yeah ...but.. if it's true and I represented the Bank's auditors... I would concerned... <_<

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Disclaimer: This is from an overheard drunken City conversation, and take it with the appropriate caution.

Apparently there has been a massive interest rate swap (or swaps) that UBS has done for Northern Rock about three years ago which they have not reported in their quarterly results. They are sitting on enormous losses and they are absolutely petrified of the due dilligence from JC Flowers. UBS are not the prime brokers, and whoever are the prime brokers may be in even more trouble.

Purely anecdotal, but you heard it here first.

I was going to say Flowers would be worried about this. but is there any higher court in these matters?. The owners can just threaten to call in all loans and collapse the economy in 24 hours; while shorting to follow through on a public announcement to cover losses so no insider trading.

I have posted this before, but I would so want to buy NR, call in all the loans and short "everything" to make a tidy profit, then hand over the bank to anyone that comes along.

Edited by maxwell

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I was going to say Flowers would be worried about this. but is there any higher court in these matters?. The owners can just threaten to call in all loans and collapse the economy in 24 hours; while shorting to follow through on a public announcement to cover losses so no insider trading.

I have posted this before, but I would so want to buy NR, call in all the loans and short "everything" to make a tidy profit, then hand over the bank to anyone that comes along.

What makes you think you could call in the loans? Mortgages are not bank overdrafts, they are fixed term lending agreements (as are unsecured loans generally).

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What makes you think you could call in the loans? Mortgages are not bank overdrafts, they are fixed term lending agreements (as are unsecured loans generally).

It's in the contract, the lender can ask for the money back before the end of the term.

Anyone got a NR contract they can scan?

Edited by maxwell

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It's in the contract, the lender can ask for the money back before the end of the term.

Anyone got a NR contract they can scan?

Surely that isn't standard practice is it??

I doubt it would stand up in court, seems a little unrealistic.

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Surely that isn't standard practice is it??

I doubt it would stand up in court, seems a little unrealistic.

Not exact but first in Google

http://www.bailii.org/cgi-bin/markup.cgi?d...;method=boolean

Lloyds refused to provide long term financing and in 1996 gave notice that they were calling in their loans. This led to protracted litigation in which the applicant was unsuccessful in his claims against Lloyds which gained possession of his home and, in 2000, made him bankrupt.

Calling in loans

The phrase is "declare all the sum secured by the mortgage to be due and immediately payable" I would like to see any claim against this being available to the lender.

Edit: to bold

Edit: I'm not sure this relates to the mortgage except indirectly, the problem is nobody on google searches ever calls in the loans until they default because it makes no sense at that point.

Edited by maxwell

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It's in the contract, the lender can ask for the money back before the end of the term.

Anyone got a NR contract they can scan?

I want to see that. I have heard this so many times but I have not once seen the evidence.

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Guest Shedfish
Has nobody got a mortgage contract ?

ask the stout lads on singingpig. they've got thousands of them :rolleyes:

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Not exact but first in Google

http://www.bailii.org/cgi-bin/markup.cgi?d...;method=boolean

Lloyds refused to provide long term financing and in 1996 gave notice that they were calling in their loans. This led to protracted litigation in which the applicant was unsuccessful in his claims against Lloyds which gained possession of his home and, in 2000, made him bankrupt.

Calling in loans

The phrase is "declare all the sum secured by the mortgage to be due and immediately payable" I would like to see any claim against this being available to the lender.

Edit: to bold

Edit: I'm not sure this relates to the mortgage except indirectly, the problem is nobody on google searches ever calls in the loans until they default because it makes no sense at that point.

The case you quote, on a quick scanning of it, concerns Lloyds calling in short-term financing (a bridging loan) not a 25 year mortgage agreement.

I think I can state with 99.99% confidence that you are utterly, utterly wrong about this. There is no way that a mortgage contract could have a clause whereby the lender could demand full repayment at the drop of a hat. They can demand repayment under specific, defined circumstances (chiefly non payment of the mortgage on a monthly basis).

It is preposterous to suggest that such a standard and common contract as a mortgage secured on a house could have such a grossly unrealistic and unfair term, and even if it did I doubt it would be tolerated in court by a judge.

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The case you quote, on a quick scanning of it, concerns Lloyds calling in short-term financing (a bridging loan) not a 25 year mortgage agreement.

I think I can state with 99.99% confidence that you are utterly, utterly wrong about this. There is no way that a mortgage contract could have a clause whereby the lender could demand full repayment at the drop of a hat. They can demand repayment under specific, defined circumstances (chiefly non payment of the mortgage on a monthly basis).

It is preposterous to suggest that such a standard and common contract as a mortgage secured on a house could have such a grossly unrealistic and unfair term, and even if it did I doubt it would be tolerated in court by a judge.

99.99% confidence doesn't equal "and even if it did I doubt it would be tolerated in court by a judge". Typical Bull during a Bear period.

Still hoping someone has a mortgage on here, and can scan it without the first page of personal details.

Edited by maxwell

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Have a look at these terms and conditions from first direct (HSBC);

mortgage legals

"#

Events of Default

1. Your loan facility will become immediately due and payable on demand by us if any of the following events occur;

1. anything said by you (or on your behalf) in support of your loan facility application or while your agreement with us is in force and having a material effect on our decision to lend or to continue to lend to you is inaccurate;

2. there is any failure to complete any of the legal formalities relating to the Security;

3. you fail to pay any amount payable under your agreement with us when due (which, for the avoidance of doubt includes, without limitation, not ensuring there are sufficient available funds in your first direct account to meet the amount payable each month);

4. you fail to comply with any other obligations under your agreement with us;

5. there is any breach of any obligation imposed by the Security;

6. if any of you become bankrupt or enter into any arrangement with your creditors or a receiver, administrator or trustee is appointed over any part of your assets or any of you is subject to similar proceedings;

7. if, after the date of our Security, you give to anyone else or anyone else acquires any other security or similar interest over or in the Property, which in our reasonable opinion adversely affects our Security.

2. If you fail to pay any amount payable under your agreement with us when due and or we make demand (in this event or if any of the other events mentioned in paragraph 8 (a) above occur) you will be in arrears and if we make demand:

1. you will continue to pay interest on your loan facility until it is repaid in full;

2. we may use any money in any account you have with first direct and/or HSBC Bank plc to reduce or repay the amount owing under your agreement with us;

3. you will pay us on a full indemnity basis any costs, expenses incurred and our reasonable charges in enforcing compliance with or remedying any breach of your agreement with us or the Security or recovering your loan facility;

4. any money incurred under paragraph (iii) above (whether demanded or not) will be debited to your loan facility and once debited will attract interest accordingly."

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99.99% confidence doesn't equal "and even if it did I doubt it would be tolerated in court by a judge". Typical Bull during a Bear period.

You are just being ridiculous, do you think we live in a banana republic? (actually, don't bother answering that. :P )

Surely you must have some faith in the legal system not to tolerate such a ridiculous demand in a contract? The law in this country is generally quite fair, which is why it is the pre-eminent system used in international contracts.

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Whatever happens this crapola has been festering under Mervyns' nose for a long time.

The BOE has utterly failed in following its remit of maintaining financial stability.

http://www.securitization.net/internationa...48&aid=3608

Special Extended free trial for site members.

An uneasy look at U.K. master trusts as spreads show slight widening

Nora Colomer, Asset Securitization Report--SourceMedia (June 7, 2004)

As U.K. master trust issuance climbs to unprecedented levels, market analysts are taking a closer look at the structure and how it has evolved over the last year. Several firms have been issuing analytical notes that look at the changing nature of assets included in master trust portfolios (see ASR 12/9/03)

Commerzbank puts master trust issuance levels at 69% of U.K. residential mortgage risk securitized in 2003, an increase of 36% over levels recorded the prior year.

The main concern that has been brewing is, "What constitutes a prime mortgage?" Analysts argue that, as the market has evolved, the parameters that dictate what type of loans can be included in these deal structures has evolved as well. One point of contention, however, is that it has become more difficult to distinguish between prime and non-prime pools, as the introduction of buy-to-let and self-certified mortgage products by prime lenders has blurred the distinguishing line.

"[Royal Bank of Scotland] and Northern Rock are now the seventh and 10th largest lenders of buy-to-let loans, respectively, and Halifax estimates that 70% of the new loans that they originate are self-certified," reported analysts at BNP Paribas. "These all are prime' master trust originators."

Analysts at the RBS noted that from the beginning of the year, pricing levels have come in by four to five basis points for five-year, triple-A paper offered in U.S. dollars. However, the blurring of lines has led to a higher level of delinquencies than is typically expected from a prime mortgage portfolio. With interest rates on the rise, risks associated with self-certified loans are becoming more of a market concern.

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Just dug mine out from under the bed, says nothing about payable on demand, but does say they can change any of the 'terms and conditions' with two months notice and an announcement in two daily papers.

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You are just being ridiculous, do you think we live in a banana republic? (actually, don't bother answering that. :P )

Surely you must have some faith in the legal system not to tolerate such a ridiculous demand in a contract? The law in this country is generally quite fair, which is why it is the pre-eminent system used in international contracts.

No, I meant you had no faith in it, because you have 99.9% certainty unless involves legal system.

#

Variation of Terms

1. If your agreement with us is in a category of mortgage agreements which we think would benefit from enhanced or additional services, we may make changes to any terms and conditions that apply to you to give you the benefit of such enhanced or additional services. We will give you 30 days written notice of such changes before they take effect.

2. We can also change the terms and conditions of your agreement with us in order to reasonably reflect the fact that any of the following have occurred or are about to occur, provided that we do not do so for any arbitrary or improper purpose:

1. any material change in conditions in or affecting the UK mortgage markets;

2. any change in the lending practices of banks and other financial organisations offering similar services to your agreement with us (including the terms on which they offer such services);

3. any change in the law, regulation or in Codes of Practice or the making of a recommendation, requirement or decision by any court, Ombudsman, regulator or similar body;

4. any change to the systems we use to manage our accounts, including changes in the technology we use;

5. any reorganisation of our business by it being acquired by or by our acquiring another bank or organisation (so that customers with similar categories of agreements can be treated in a similar way);

6. any event beyond our control;

We will give you 30 days written notice of any such change and the amendment shall take effect from the date specified in such notice. There is also a specific power to amend your agreement with us in the event of substitution of Sterling by the Euro, set out in Clause 9 above.

Ah i got tired of bolding stuff.

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Have a look at these terms and conditions from first direct (HSBC);

1. Your loan facility will become immediately due and payable on demand by us if any of the following events occur;

1. anything said by you (or on your behalf) in support of your loan facility application or while your agreement with us is in force and having a material effect on our decision to lend or to continue to lend to you is inaccurate;

Never mind variation of terms, this will get about 5 million people on its own! :(

Edited by bobthe~

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No, I meant you had no faith in it, because you have 99.9% certainty unless involves legal system.

#

Variation of Terms

1. If your agreement with us is in a category of mortgage agreements which we think would benefit from enhanced or additional services, we may make changes to any terms and conditions that apply to you to give you the benefit of such enhanced or additional services. We will give you 30 days written notice of such changes before they take effect.

2. We can also change the terms and conditions of your agreement with us in order to reasonably reflect the fact that any of the following have occurred or are about to occur, provided that we do not do so for any arbitrary or improper purpose:

1. any material change in conditions in or affecting the UK mortgage markets;

2. any change in the lending practices of banks and other financial organisations offering similar services to your agreement with us (including the terms on which they offer such services);

3. any change in the law, regulation or in Codes of Practice or the making of a recommendation, requirement or decision by any court, Ombudsman, regulator or similar body;

4. any change to the systems we use to manage our accounts, including changes in the technology we use;

5. any reorganisation of our business by it being acquired by or by our acquiring another bank or organisation (so that customers with similar categories of agreements can be treated in a similar way);

6. any event beyond our control;

We will give you 30 days written notice of any such change and the amendment shall take effect from the date specified in such notice. There is also a specific power to amend your agreement with us in the event of substitution of Sterling by the Euro, set out in Clause 9 above.

Ah i got tired of bolding stuff.

I get it now, you are afraid to go out of the house in case someone has left a banana skin on the footpath and you don't see it, slip on it, go to hospital, have an x-ray, find out you are fine only to stub your toe on a cleaner's bucket, fall face first into a laundry basket which gets put on a truck going to the laundry but is held up by a gang of bed sheet thieves who commandeer the truck, drive it to the airport, hijack a plane and then dump you out at 100,000 ft to provide clothing relief to the people of Burma.

Hope you are coping ok.

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Never mind variation of terms, this will get about 5 million people on its own! :(

Now that is a valid point to all of the liars out there, but why would banks investigate this? It would be a self-fulfilling prophesy destroying the value of assets on which their loans are secured.

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I get it now, you are afraid to go out of the house in case someone has left a banana skin on the footpath and you don't see it, slip on it, go to hospital, have an x-ray, find out you are fine only to stub your toe on a cleaner's bucket, fall face first into a laundry basket which gets put on a truck going to the laundry but is held up by a gang of bed sheet thieves who commandeer the truck, drive it to the airport, hijack a plane and then dump you out at 100,000 ft to provide clothing relief to the people of Burma.

Hope you are coping ok.

What silly reactionary people the government are in relation to , banks and the FSA? or £30,000 over 48 hours. I'm a sloth compared to that.

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No court would enforce it.

There is no chance of them calling in a mortgage on this basis.

A complete collapse of the mortgage company due to a system wide crash starting in the US would fall under "outside our control" rules for both parties.

Systemic failures are act of god type stuff. Theres no way all contract holders could be held liable and theres no way you can only attack a few without a criteria for calling in the contract the rule would have to apply to all.

Add to this the politics side of it and calling in the mortgages is a non starter.

Any 30 days notice period is a default clause, that means you can object within that time frame and the matter goes to court. I'd think that objections are highly likely, and court cases are going to be long and slow. In the meantime, no cash is getting paid and someone is gonna fold.

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Now that really is cryptic....... :blink:

They changed the law on deposit protection, Northern Rock, 30K limits, Alistar Dalrling, anything gettig through, it all happened afer NR were about to collapse. No bother just go back to strawman, slippery slope, etc.

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