Monday, July 5, 2010

Shareholders shafted by BTL mortgages & Liar Loans.

No compensation for bitter Bradford and Bingley investors

Former investors in nationalised lender Bradford & Bingley should receive no compensation for their shares, the independent valuer of the stricken business said today.

Posted by mr g @ 07:29 PM (2580 views)
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21 thoughts on “Shareholders shafted by BTL mortgages & Liar Loans.

  • Personally, I’m outraged that I had to pay my money to the these reckless, feckless gamblers. These were the idiots that were bribed with free shares and dividends to create the get-rich quick scheme. Now they want to be compensated (even more) than they already have been, and for what? For not receiving as much free cash as they feel themselves entitled to. Unbelievable.

    Noggins

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  • yorkshireman says:

    Where do the investors expect the compensation to come from ? . Without the intervention of HM Govt. there would be no company at all. If you enjoy the rewards of an investment, then you have to accept the risks, that being, you may get little or none of your investment back. Seems like a logical and sensible judgement to me.

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  • @Yorkshireman

    I agree that you have to accept risks. However, B & B shareholders have been exposed to unnecessary risk thanks to crass stupidity and some questionable lending practices.

    For the record, I have no personal interest in this matter.

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  • Can’t understand why anyone would complain about this. ONly shows they were dumb enough to buy shares in a firm they knew nothing about.

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  • At the end of the day, the shareholders have to make it their business to know how their money is being used. There is a very harsh lesson here but it is a vitally important lesson for anyone who buys equities to understand what they’re doing. According to this video, 75% of B&B’s mortgage book was described as ‘non-standard’ in this video.

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  • novice pete says:

    @3 quiet guy, he knows someone who got a self cert mortgage while on the dole, sums up the colossal failings nicely

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  • the number cruncher says:

    The directors should go to prison. The shareholders should loose all. bondholders should have a debt for equity swap and loose most so that the taxpayer does not foot the bill or the risk. Only the depositors deserve any protection.

    It is perverse for the Government to guarantee any private enterprise. But that’s what happens in our screwed up world.

    RECAPTCHA= politicians jubilees (unbelievable if you know the original meaning of a jubilee)

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  • @the number cruncher

    “It is perverse for the Government to guarantee any private enterprise.”

    Just curious; any thoughts about the FSA £50K guarantee for savers? Theoretically, this should be removed as well to try to force retail investors to think about how their savings are being used.

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  • tenyearstogetmymoneyback says:

    quiet guy wrote “Just curious; any thoughts about the FSA £50K guarantee for savers?”

    The trouble is you can’t predict what the directors will decide tomorrow.
    Until 2008 Lloyds were always being criticised for being too conservative and not taking any risks.
    Back to Bradford and Bingley (and Northern Rock) I am sure that fifteen years ago they were very
    safe places to put your money.

    You can’t expect OAPs to keep studying what financial organisations are doing with their money.
    If you did they would just keep their money under the bed. We should have expected the FSA
    to spot things like the “Together” mortgage and say “If you don’t stop that we will outlaw it”.

    p.s. For about the tenth time I will mention the 2004 BBC mortgage madness program
    news.bbc.co.uk/1/hi/business/3478635.stm
    which predicted the mess long before the FSA. I was so shocked I sold my Halifax shares the
    next day (but later bought Lloyds) 🙁

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  • The staff at my Local Bradford and Bingley, [with whom i used to have ISA’s] were still calling me, aggressively attempting to make me invest in shares, and when I questioned them, about printing on their literature, that ‘house prices would never fall’ [when their main product was the BTL mortgage] And my taxes bailing them out to the tune of £50billion.

    They could not care less. They were not trying to avoid the questions. they genuinely seemed at pains to even understand why they should feel respnsible. Its truly truly unbelievable.

    This branch let anyone who could scrawl their sign borrow hundreds of thousands.

    I was basically told, thats all in the past, were now the Abbey. We have a shiny new red sign. Bradford and who?……

    Nothing bad happened at the bradford and bingley…………?!

    All the B&B staff, still have their jobs, when their has been a lot of unemployment in the area.

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  • “B&B has an asset book very skewed towards non-standard, non-prime mortgages”

    Ummm, do you see what he did there? The UK has no subprime you see?

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  • the number cruncher says:

    tenyearstogetmymoneyback @ 7

    I suggest granny put her money NS&I and not gamble with it then.

    Yes the FSA should have closed B&B down but as we know our then Government was mesmerized by the neo-liberal light touch mantra.

    Investment is a gable – plain and simple, just like going to the bookies the more you risk the more you loose or gain. It beggars believe that you can even countenance the idea that the Government should some how guarantee gambling. Perhaps we can set up a support fund that loose at the 3.30 at Kempton next week!

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  • The Government HAS guaranteed many who have gambled, by protecting low interest rates and
    artificially propping up their ‘pride and joy’.

    You have set up a support fund, by virtue of the pittance paid to savers.

    Perhaps the same fabulous odds are not available now to the new gambler, but hey, the horse has already bolted.

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  • Splitting up the banks would solve all of this. Whether you were a saver, investor or whatever you could choose where to put your cash based on risk and reward.

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  • mark wadsworth says:

    What the number cruncher days at 5. Nationalising banks is a dark and dangerous road, debt-for-equity swaps is the way forward.

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  • need-a-crash says:

    @10. Quite agree the government has bailed out reckless homeowners and property speculators, so why not bail out honest investors who bought shares in B&B??

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  • the number cruncher says:

    timmy

    splitting up the banks will solve nothing, just a short term patch

    The only thing that will solve this is the proper implementation of georgist economic policy by means of Land Value Taxation. Any other regulatory method will be subverted as it was before. Although it took the combined efforts of Reagan and Thatcher followed by the impotent Clinton and Brown to fully allow vested interests to dismantle the legislation put in place by the wise heads after the great depression.

    MW @ 12

    This is something we both recognise as an clear and present threat to the welfare of our country. The nationalised banks will be a mill stone on our and our children’s future. I would like to know your thoughts on what you think the ConDems will do about, if anything. Can the government still do a debt for equity swap on the bond holders?

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  • mark wadsworth says:

    TNC, 14.

    It appears that the Tories are indeed The Blue Wing of the Home-Owner-Ist Party. Although they must know that the nationalised banks are a huge black hole and drain on the productive economy, they see it as vital to keep pumping money into the banks (nationalised or not) in the vague hope that they in turn pump money into the house price bubble. Or at least, not withdrawing taxpayer support according to the original time table.

    I agree with the first half of your comment as well, of course.

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  • I read somewhere 70% of Britain is owned by 1% of the population. No doubt mostly aristocratic old money. LVT will never happen under the current social statu quo.

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  • @tenyearstogetmymoneyback

    “You can’t expect OAPs to keep studying what financial organisations are doing with their money.”

    Yes, it’s a tricky one. I nearly put some of my savings in Kaupthing so I know how easy it is to get it wrong. That said, the £50K limit seems to generous. Even throttling back the compensation to (say) 100% of the first £10K 95% of the next £10K and 90% of the next £10K might make people think without hitting them too hard for mistakes up to £30K.

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  • tenyearstogetmymoneyback says:

    the number cruncher wrote “I suggest granny put her money NS&I and not gamble with it then”

    So she puts her money with NS&I who via the Goverment promptly give it to Lloyds or RBS.

    Just to be clear I was talking about deposit accounts here. Shareholder should just be greatful that they have Limited Liability
    for any losses.

    As for the £50K guarantee, if this was removed how much money would be withdrawn in how short a time ?
    It would be Northern Rock x 50.

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