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S K Y: Rock Negative Equity Threat Grows

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http://uk.biz.yahoo.com/04082008/140/rock-...reat-grows.html

Monday August 4, 10:50 AM
Rock Negative Equity Threat Grows
By Sky News
| | |
About a fifth of Northern Rock mortgage customers face the prospect of negative equity next year as house prices continue their slump, according to reports.
Around 5% of borrowers with the Newcastle-based lender already have a bigger mortgage (Advertisement)
debt than the value of their home, the Daily Telegraph reported.
With house prices estimated to slide by up to 20% by the end of 2009, another 15% of mortgage holders are likely to find themselves in the same situation, the paper said.
This equates to around 140,000 homes whose owners are likely to face difficulties remortgaging with another bank.
The news comes amid expectations that the state-owned bank
will this week unveil substantial losses
for the six months to June...../

A fifth? In yer dreams mate. How about 50%?

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http://uk.biz.yahoo.com/04082008/140/rock-...reat-grows.html
Monday August 4, 10:50 AM
Rock Negative Equity Threat Grows
By Sky News
| | |
About a fifth of Northern Rock mortgage customers face the prospect of negative equity next year as house prices continue their slump, according to reports.
Around 5% of borrowers with the Newcastle-based lender already have a bigger mortgage (Advertisement)
debt than the value of their home, the Daily Telegraph reported.
With house prices estimated to slide by up to 20% by the end of 2009, another 15% of mortgage holders are likely to find themselves in the same situation, the paper said.
This equates to around 140,000 homes whose owners are likely to face difficulties remortgaging with another bank.
The news comes amid expectations that the state-owned bank
will this week unveil substantial losses
for the six months to June...../

A fifth? In yer dreams mate. How about 50%?

yes, the reporters always quote the asking prices indexes, yet completions are down to 15% of what they were last year

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A fifth? In yer dreams mate. How about 50%?

Already at a fifth imo , they just havn't realised it or can't accept reality of it all , and let's not forget NR sold more mortgages in the first half of 2007 than any other bank ...........

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http://uk.biz.yahoo.com/04082008/140/rock-...reat-grows.html
Monday August 4, 10:50 AM
Rock Negative Equity Threat Grows
By Sky News
| | |
About a fifth of Northern Rock mortgage customers face the prospect of negative equity next year as house prices continue their slump, according to reports.
Around 5% of borrowers with the Newcastle-based lender already have a bigger mortgage (Advertisement)
debt than the value of their home, the Daily Telegraph reported.
With house prices estimated to slide by up to 20% by the end of 2009, another 15% of mortgage holders are likely to find themselves in the same situation, the paper said.
This equates to around 140,000 homes whose owners are likely to face difficulties remortgaging with another bank.
The news comes amid expectations that the state-owned bank
will this week unveil substantial losses
for the six months to June...../

A fifth? In yer dreams mate. How about 50%?

Who is going to cover the substantial losses?

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http://uk.biz.yahoo.com/04082008/140/rock-...reat-grows.html
Monday August 4, 10:50 AM
Rock Negative Equity Threat Grows
By Sky News
| | |
About a fifth of Northern Rock mortgage customers face the prospect of negative equity next year as house prices continue their slump, according to reports.
Around 5% of borrowers with the Newcastle-based lender already have a bigger mortgage (Advertisement)
debt than the value of their home, the Daily Telegraph reported.
With house prices estimated to slide by up to 20% by the end of 2009, another 15% of mortgage holders are likely to find themselves in the same situation, the paper said.
This equates to around 140,000 homes whose owners are likely to face difficulties remortgaging with another bank.
The news comes amid expectations that the state-owned bank
will this week unveil substantial losses
for the six months to June...../

A fifth? In yer dreams mate. How about 50%?

Someone on another forum i post on sometimes (no not that one...) was on about NR having "assets greater than its liabilities" which sounds like w@nk to me. Has anyone got a killer link to prove that this bloke is a muppet? It would make my day, he really talks rubbish about all kinds of stuff...

cheers :P

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Someone on another forum i post on sometimes (no not that one...) was on about NR having "assets greater than its liabilities" which sounds like w@nk to me. Has anyone got a killer link to prove that this bloke is a muppet? It would make my day, he really talks rubbish about all kinds of stuff...

cheers :P

oh come on the government would never lie to us would then?.... ;)

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Someone on another forum i post on sometimes (no not that one...) was on about NR having "assets greater than its liabilities" which sounds like w@nk to me. Has anyone got a killer link to prove that this bloke is a muppet? It would make my day, he really talks rubbish about all kinds of stuff...

cheers :P

Sorry, but the assets are greater than the liabilities, they were illiquid not insolvent. They may (and probably will) at some point become technically insolvent, when enough houses are repossessed at a loss to wipe out their retained profits, but I doubt this has happened yet. When the accounts are released we'll know how big a loss it is, and how much of prior profits this wipes out.

I'm a bit surprised the accounts will be released, I always presumed they wouldn't be or they would be hidden amongst government accounts.

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A fifth? In yer dreams mate. How about 50%?

Not that this is a poll, but I'm going to guess that the final total will be around 1/3rd of Gordon-Rock customers will eventually default.

* And, for the record, I base this on absolutely nothing. Just a gut feeling.

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Sorry, but the assets are greater than the liabilities, they were illiquid not insolvent. They may (and probably will) at some point become technically insolvent, when enough houses are repossessed at a loss to wipe out their retained profits, but I doubt this has happened yet. When the accounts are released we'll know how big a loss it is, and how much of prior profits this wipes out.

I'm a bit surprised the accounts will be released, I always presumed they wouldn't be or they would be hidden amongst government accounts.

Does that not rely on, say, a £150K mortgage at SVR, at 125% of LTV, to someone who lied about their income, being valued as an asset at ~£300K though? My point was that loads of their loans are going to not be repaid, and the houses then repossessed will be worth far less than they claim.

Any more details gratefully received, thanks.

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Does that not rely on, say, a £150K mortgage at SVR, at 125% of LTV, to someone who lied about their income, being valued as an asset at ~£300K though? My point was that loads of their loans are going to not be repaid, and the houses then repossessed will be worth far less than they claim.

Any more details gratefully received, thanks.

Northern Rock was nationalised because it couldn't operate in the private sector, as it couldn't borrow wholesale anymore. It's loan book is also a bag of sh!t, but these are 2 different things.

The point is, until the bank is forced to write down the loan because it eventually loses money at auction after repossessing, the banks books show a loan of 150,000 and it is making profit on the spread between borrowing from the BOE / Savers and it's SVR (which it has raised to try and force borrowers to leave).

There will potentially come a point when they have suffered enough losses to wipe out all their past profits, at this point they will be insolvent (liabilities exceed assets) and this is when we pay for it. However until that point, it's assets exceeds it's liabilities and it is solvent, it has the potential to go insolvent in the future, but no one can be sure the loans won't be repaid (although in reality we all think a good proportion of them won't be). But until the losses happen, no one can say what the outcome will be, and so for now, their assets exceed liabilities and they are still solvent.

For the record, I think they will post a huge loss this week, probably overstating the real loss, as they want to prove to the ex-shareholders that there's no value left in the company, ahead of the decision whether to award compensation or not.

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Not that this is a poll, but I'm going to guess that the final total will be around 1/3rd of Gordon-Rock customers will eventually default.

* And, for the record, I base this on absolutely nothing. Just a gut feeling.

I`m going to go for 2/3rd`s.

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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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