Tuesday, February 19, 2008

Northern Rock Reverse Run

Robert Preston

This made me smile, if only it could pan out like this! Increase in Mortgage rates on the bcards I hope!!

Posted by lloyd @ 11:20 AM (659 views)
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4 thoughts on “Northern Rock Reverse Run

  • Has anybody stopped to consider that by raising interest rates, NR may not lose quite that many mortgage holders. How many banks will consider taking on people who have quite clearly overtstretched themselves and are the fundamental core of NR’s debt problems?

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  • Sold My Soul To The Never Never Never says:

    If NR plan to shrink their business by increasing mortgage rates then the only loans they will end up with is the sub prime. Prime borrowers will go elsewhere for better rates and the 125% borrowers – they will just stay on the books as they can’t take their loans elsewhere. Looks like we are stuck with propping up this dodgy business for a very long time. I suppose that the inflow of cash from savers will make the business look ‘good’ – but we know the truth!

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  • Check out comment # 13. Coooookooo Coooookooo !!

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  • “I have worked with NR professionally”

    Given his bizarre comments it goes some way to explaining why NR has failed as a business.

    It is a very real impact though – Sandler would be very well advised to increase rates to reduce the size of the mortgage back, and therefore be able to cut NRs over-reliance on the money markets. He would also be very wise to spread it around a bit…. excellent rates for people with very low LTVs and excessively high rates for anyone stupid enought to want a 125% mortgage. the only possible problem with this is the prospect of government backed repossessions – but something bad has got to happen in this situation – it was never going to be “all roses”.

    This will automatically cut the funding for all those idiots that still seem so keen to pay far more for a house than it is actually worth. This does them a favour, long term, and will undoubtedly blow the froth off the market. It will also cause other banks to think twice before offering high LTVs, in addition to allowing them to increase their margin. It will not hurt the public – just that segment of the population who have been stupid enough to borrow more than they could afford.

    The next 6 month could be very good.

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