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Bradford & Bingley - A Few Figures

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Data pulled from B&B website:

Residential mortgage book value as at 31/12/07: £39.4bn

Has gone up 90% since 2004 (from £20.68bn)

New net residential mortgage lending over that period was

2004: £3bn

2005: £2.5bn

2006: £5

2007: £8.3bn

As at 31/12/07, 45% of all residential mortgages were BTL and 16% self-cert.

So we are looking at £17.73bn worth of BTL mortgages and £6.3bn worth of self-cert

Taking 2006 and 2007 as peak HPI years, this means that over £8bn of BTL/Self cert mortgages (£5bn + £8.3bn * 61%) were granted by B&B !!

Since we can safely assume that a large share of BTL mortgages granted in 2006 & '07 were secured on new-builds (very likely urban 'apartments'), I wonder whether that crunchy little number is what put TPG off and is causing B&B to keep their books closed ........

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Data pulled from B&B website:

Residential mortgage book value as at 31/12/07: £39.4bn

Has gone up 90% since 2004 (from £20.68bn)

New net residential mortgage lending over that period was

2004: £3bn

2005: £2.5bn

2006: £5

2007: £8.3bn

As at 31/12/07, 45% of all residential mortgages were BTL and 16% self-cert.

So we are looking at £17.73bn worth of BTL mortgages and £6.3bn worth of self-cert

Taking 2006 and 2007 as peak HPI years, this means that over £8bn of BTL/Self cert mortgages (£5bn + £8.3bn * 61%) were granted by B&B !!

Since we can safely assume that a large share of BTL mortgages granted in 2006 & '07 were secured on new-builds (very likely urban 'apartments'), I wonder whether that crunchy little number is what put TPG off and is causing B&B to keep their books closed ........

Those figures just underline how criminally stupid the management of B&B were. If you have any savings at all with them you have a moral duty to remove it.

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Those figures just underline how criminally stupid the management of B&B were. If you have any savings at all with them you have a moral duty to remove it.

Hear Hear !!

What really p***ses me off is having to listen to so-called experts spouting on that B&B is not NRII and will soon be, thanks to the full-underwritten £400m share issue, one of the best capitalised banks in Europe.

You could even argue that B&B is in a worse situation than NR - by all accounts their mortgage book is even dodgier and their retail deposits must be shrinking fast, whereas NR offer market-leading saving products 100% guaranteed by HM.

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Data pulled from B&B website:

Residential mortgage book value as at 31/12/07: £39.4bn

Has gone up 90% since 2004 (from £20.68bn)

New net residential mortgage lending over that period was

2004: £3bn

2005: £2.5bn

2006: £5

2007: £8.3bn

As at 31/12/07, 45% of all residential mortgages were BTL and 16% self-cert.

So we are looking at £17.73bn worth of BTL mortgages and £6.3bn worth of self-cert

Taking 2006 and 2007 as peak HPI years, this means that over £8bn of BTL/Self cert mortgages (£5bn + £8.3bn * 61%) were granted by B&B !!

Since we can safely assume that a large share of BTL mortgages granted in 2006 & '07 were secured on new-builds (very likely urban 'apartments'), I wonder whether that crunchy little number is what put TPG off and is causing B&B to keep their books closed ........

Another figure.

A 1% write off on their mortage book will leave them with no 400million rights issue cash left.

Its all ********.

They are doomed.

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http://www.dailymail.co.uk/news/article-10...ley-rescue.html

Pension funds and life insurers Standard Life, Legal & General, Prudential and Insight, have agreed to pay about £150 million for their shares.

HSBC, Lloyds TSB, HBOS, Barclays, Abbey and NatWest owner Royal Bank of Scotland have, meanwhile, said they will stump up another £150 million.

Because of the crashing share price, both groups of investors are currently £50 million down.

...................

Bradford & Bingley is Britain's biggest buy-to-let mortgage lender - and this is the whole problem.

Buy-to-let is a relatively new phenomenon which took off about a decade ago and saw tens of thousands of investors buying properties to let out.

As a result, it is the first time that the industry has been put to the test to see if it can survive a major downturn.

There are just over one million buy-to-let mortgages in this country, and many have the former building society's name on them.

Its total mortgage book is about £40billion, and the majority of it - roughly £24billion - is based on buy-to-let loans.

But rapidly rising numbers of its customers are defaulting on their mortgage payments. This is because the very nature of buy-to-let means that buyers cannot always be sure of having tenants in place.

Without tenants, they struggle to cover their mortgage payments. At the same time, the downturn in the housing market means owners can't sell on their properties and get back what they paid for them.

The price of new-build flats in city centres have proven to be the biggest loser of the housing market meltdown.

And it was these types of flats which were particularly popular among investors, who often bought off-plan.

Many of the loans were taken out by were amateurs with no professional experience in the property market which means they are particularly vulnerable.

Many new flats, which were bought just two years ago for hundreds of thousands of pounds, are 'completely unsaleable'.

Slightly larger figure given by the ever accurate daily mail.

It appears that the loans where given out by amateurs pretending to be bankers or should that be a W???

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Shaky books, crashing property market, 95% recent drop off in share value all good stuff for a massive rebound in SP:

BRADFORD & BINGLEY (LSE:BB.L)

Last Trade: 41.00 p

Trade Time: 2:52PM

Change: 7.00 (20.59%)

Pattern looking like the dying days of NR. A whiff of hope and up they go. Potential backers look at books and away they go along with another stock crash. On and on until someone puts them out of their misery. We are approaching default dseason as mortgage resets and higher IR kick in again so they can't have long to live.

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Shaky books, crashing property market, 95% recent drop off in share value all good stuff for a massive rebound in SP:

BRADFORD & BINGLEY (LSE:BB.L)

Last Trade: 41.00 p

Trade Time: 2:52PM

Change: 7.00 (20.59%)

Pattern looking like the dying days of NR. A whiff of hope and up they go. Potential backers look at books and away they go along with another stock crash. On and on until someone puts them out of their misery. We are approaching default dseason as mortgage resets and higher IR kick in again so they can't have long to live.

Yep, another 34% required before the share price reaches 55 p ........

I take your point though - B&B will want to shrink their mortgage book and, who in hell is going to re-mortgage all that BTL and Self-cert rubbish?

I reckon that the spike in the share price could be shorters closing their positions before the shares are suspended ....

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> The IO mortgages should never have been allowed.

There's nothing wrong with IO mortgages, as long as people have a plan for repaying the capital.

IO make BTL accounts slightly easier to prepare as you don't need to extract capital repayment costs.

Although having said that my previous LL (now repossessed) had a 35 year interest only mortgage, which should have flagged some alarm bells with the lender...

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Would be interesting to see how many of those were IO mortgages, probably quite high. The IO mortgages should never have been allowed.

IO mortgages where seen as a win win for the bank. It's highly likely they would never ever get paid off, at the end of the 25 year term all what the BTL would to is take out a new IO mortgage and just keep paying the interest and never actually reduce the amount owed.

This idea only works if:

1) House prices keep going up

2) Interest rates don't go up making the repayments more than the rent

3) There isn't a housing crash and a recession

When your chasing the bottom line the above 3 minor points are ignored as it might stop you making your yearly target and your bosses will want to know why bank X is making more money than you.

It's all about selling and not thinking about long term consequences.

Clearly this logic is flawed because at some point the sh*t hits the fan and suddenly the bank realises it no longer has the assets to cover it's liabilities as house prices come crashing down and interest repayments go up, otherwise know as we're f*****.

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Yep, another 34% required before the share price reaches 55 p ........

I take your point though - B&B will want to shrink their mortgage book and, who in hell is going to re-mortgage all that BTL and Self-cert rubbish?

I reckon that the spike in the share price could be shorters closing their positions before the shares are suspended ....

Shrinking the mortgage book means selling the good stuff (because there's less loss to be booked on it and it generates cash) and holding on to the rubbish that will continue to default at an increasing pace. It just puts off judgment day by a couple of weeks/months.

Edited by newbie

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> The IO mortgages should never have been allowed.

There's nothing wrong with IO mortgages, as long as people have a plan for repaying the capital.

IO make BTL accounts slightly easier to prepare as you don't need to extract capital repayment costs.

Although having said that my previous LL (now repossessed) had a 35 year interest only mortgage, which should have flagged some alarm bells with the lender...

A few years ago I discussed an IO offset mortgage with Abbey. I was flabbergasted when they asked me: "Over what period?" I started out assuming that shorter periods would have lower rates - and I'd want that... because - with frequent options to repay in full, why wouldn't you grab as many years as they will offer? My plan was always to try to repay within 5-10 years anything I borrowed... with the remainder being my 'leeway' should my aggressive repayment wishes, in practice, fall short of my expectations... 20 year; 25 year and 30 year were all on the table at identical rates.

Edited by A.steve

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What we need to find out is the breakdown of LTV i.e. 2bn at 90-100% ltv, 3bn at 80-90% ltv. Some banks publish this figure in their accounts, but B&B don't all they say is the total LTV of all their mortgages is 55% which is no use to anyone.

However, a third of their current mortgage book seems to have been issued over the past 2 years (13bn of 39bn). Assuming a 90% ltv on these, and house price falls already of getting on for 10%, they're pretty close to being exposed to 13bn of mortgages, another 10% fall in prices and they're potentially writing off another 1.3bn. They're struggling to raise 400mn, how are they going to raise 1.3bn next year?

This is being quite conservative given the rapid fall in flat prices over the recent months, and the prices obtained at auctions recently, plus some of the valuations obtained when they were purchased may not have been accurate, plus gifted deposits etc. I'd hate to think how exposed they really are.

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There's nothing wrong with IO mortgages, as long as people have a plan for repaying the capital.

Precisely, trouble is there is strong anecdotal evidence to believe that a high percentage of IO mortgages were granted without a proper capital repayment plan being in place.

Indeed for many buyers, an IO mortgage with no capital repayment plan was the only way they could afford to buy.

A well known but seldom publicly-acknowledged fact. The impending 'misselling scandal' will no doubt reveal the true horror of the situation .....

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Precisely, trouble is there is strong anecdotal evidence to believe that a high percentage of IO mortgages were granted without a proper capital repayment plan being in place.

Indeed for many buyers, an IO mortgage with no capital repayment plan was the only way they could afford to buy.

A well known but seldom publicly-acknowledged fact. The impending 'misselling scandal' will no doubt reveal the true horror of the situation .....

In the past, you needed to show the bank you had a suitable repayment vehicle in order to able to borrow anything over 50% LTV. Of course, when the 'house prices only ever go up' mentality set in, they stopped caring about the repayment vehicle and were calling all the BTLs to jump on board as they could just sell up when they wanted to repay the mortgage since they don't live their. A year ago, it seemed logical to them, but now they can't sell and both bank and borrower are screwed.

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Guest Shedfish
A 1% write off on their mortage book will leave them with no 400million rights issue cash left.

Coyote cliff moment

Those figures just underline how criminally stupid the management of B&B were. If you have any savings at all with them you have a moral duty to remove it.

what he said...

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Precisely, trouble is there is strong anecdotal evidence to believe that a high percentage of IO mortgages were granted without a proper capital repayment plan being in place.

Indeed for many buyers, an IO mortgage with no capital repayment plan was the only way they could afford to buy.

A well known but seldom publicly-acknowledged fact. The impending 'misselling scandal' will no doubt reveal the true horror of the situation .....

I doubt anyone will want to look into misselling as you would be treading on very very dangerous ground. We have an asset bubble created by banks misselling loans to boost profits, these missold loans further boosted house prices meaning every bigger loans could be sold generating even more profit.

If you start to reveal that house prices increases where a result of misselling by banks looking after their own self interest, EVERYONE WILL SUE.

I can't emphasize this enough, it means the house I bought in 2006 was hugely overvalued because of the banking industry which stood to profit out of my loan, therefore a large chunk of my loan is in fact FRAUDULANT as house prices have been artificially rigged to profit the banks. This also raises the prospect that the banks have been operating as a cartel to boost profits.

I can guarantee the banks and the politicians will be colluding to make sure no investigation ever happens. I think you are living in a dream world if you think it will.

NO INVESTIGATION WILL EVER HAPPEN

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What we need to find out is the breakdown of LTV i.e. 2bn at 90-100% ltv, 3bn at 80-90% ltv. Some banks publish this figure in their accounts, but B&B don't all they say is the total LTV of all their mortgages is 55% which is no use to anyone.

However, a third of their current mortgage book seems to have been issued over the past 2 years (13bn of 39bn). Assuming a 90% ltv on these, and house price falls already of getting on for 10%, they're pretty close to being exposed to 13bn of mortgages, another 10% fall in prices and they're potentially writing off another 1.3bn. They're struggling to raise 400mn, how are they going to raise 1.3bn next year?

This is being quite conservative given the rapid fall in flat prices over the recent months, and the prices obtained at auctions recently, plus some of the valuations obtained when they were purchased may not have been accurate, plus gifted deposits etc. I'd hate to think how exposed they really are.

Charlie, I think that's wishful thinking. They only offered 90% BTL mortgages for a short period of time.

The main worry with B&B was their 'One day remortgage' criteria, which meant an investor could buy with closed bridging and the remortgage to MX with no money down.

But again, this wasn't rife as many kept it to themselves for competitive advantage (greed) and all properties were valued by an approved RICS surveyor at market value and this was only available to 85% loan to value schemes.

Overall Mortgage Express were very tight on lending criteria during the boom and wouldn't have muppets. Althought I can't say the same about the GMAC loans.

They also specialise in high yielding student properties.

If prices fall they are only exposed if borrowers default.

Recent movements in the buy to let market seem to suggest rates averaging out at the 6.5% to 7% mark. This will mean your average investor will still cover their I/O payments with rental income.

I guess the market speculators are making a quick buck shorting B&B just because there is no confidence in UK banking at the moment.

I'm not saying there won't be problems at B&B. But with effective arrears management - which are very low by the way over there, we're talking percentages of the overall book - why can't they be OK?

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Precisely, trouble is there is strong anecdotal evidence to believe that a high percentage of IO mortgages were granted without a proper capital repayment plan being in place.

Indeed for many buyers, an IO mortgage with no capital repayment plan was the only way they could afford to buy.

A well known but seldom publicly-acknowledged fact. The impending 'misselling scandal' will no doubt reveal the true horror of the situation .....

Yes but the banks accept 'sale of property' as a repayment plan and lets face it that is about as reliable as you're going to get given the performance of other asset classes opposed to property going back over time.

BTL is unregulated business don't forget. There will be no miss-selling scandal as there is no comeback on any party involved in the transaction from the lending side.

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Yes but the banks accept 'sale of property' as a repayment plan and lets face it that is about as reliable as you're going to get given the performance of other asset classes opposed to property going back over time.

BTL is unregulated business don't forget. There will be no miss-selling scandal as there is no comeback on any party involved in the transaction from the lending side.

I was referring to non BTL IO mortgages. What then?

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I doubt anyone will want to look into misselling as you would be treading on very very dangerous ground. We have an asset bubble created by banks misselling loans to boost profits, these missold loans further boosted house prices meaning every bigger loans could be sold generating even more profit.

If you start to reveal that house prices increases where a result of misselling by banks looking after their own self interest, EVERYONE WILL SUE.

I can't emphasize this enough, it means the house I bought in 2006 was hugely overvalued because of the banking industry which stood to profit out of my loan, therefore a large chunk of my loan is in fact FRAUDULANT as house prices have been artificially rigged to profit the banks. This also raises the prospect that the banks have been operating as a cartel to boost profits.

I can guarantee the banks and the politicians will be colluding to make sure no investigation ever happens. I think you are living in a dream world if you think it will.

NO INVESTIGATION WILL EVER HAPPEN

Yes you are very correct, no case there I'm afraid.

An asset bubble created by banks? If a bank has money to lend and someone comes to them to ask for some the bank has no say over the price that person pays for the asset the loan is secured upon.

That is ridiculous. The only parties responsible for the asset bubble are the public at large and the government.

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price target of 0p has been assigned to Bradford & Bingley by brokers Pali International

On that basis why are the FSA not knocking on their door and protecting the public from losing their money from what is a rogue trader ?

Where is Gordon Brown ? Whilst the UK financial sector goes to the wall, Gordon is discussing the already clearly failed Globalisation Project. The very same project this Government denied was in operation some ten years ago.

B&B should be wound up immediately, and the depositors handed their money back before B&B sell off the prime assets to your Ex Prime Minister before being taken over by the taxpayer.

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  • 399 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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