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Old 05-08-2008, 13:16   #241
Kryten
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Originally Posted by jester View Post
I am NOT saying that if you have or had a mortgage with the NR then you are like this however I do believe that because of the flawed business model of the NR it would attract a greater proportion of the less financially astute. In all my dealings with the vendors they came across as being a bit nieve financially.

I do believe that other lenders have exposure to this kind of risky lending but the NR's exposure must be far greater.
Their plan was that should you default though the house price would be much higher and as such be able to profit from having good assets. However house prices stalled pretty quickly and started to go down leaving them very exposed to people defaulting and not having assets to cover the loan (short sale). Very bad (risky) business model really to have.

This type of mortgage typically did attract those with poorer finances and wanting to borrow way more than they could really afford or more than the house was worth (upto 125% mortgages were offered!).
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Last edited by Kryten; 05-08-2008 at 13:17.
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Old 05-08-2008, 13:29   #242
NicolaUK
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How do you mean - offloaded?

There was a comment on the BBC story earlier (now removed) from some banking consultant/commentator saying something along the lines of anyone with a decent credit rating will have jumped ship leaving only dodgy mortgage holders at NR.

Sorry but that is nonsense - we've left our mortgage with them simply because we're on a great 5 year fixed rate. We're less than half way through a 4.74% 5 year fixed deal so why on earth would we have tried to move elsewhere for a higher rate? I can understand depositers running to get their cash back but as a borrower there's no risk in remaining with NR.

Maybe that's why his comments were removed - because they made no sense. Yes, no doubt NR has more than it's fair share of risky loans because of its unwise lending criteria but that doesn't mean it doesn't still have plenty of good loans on its book.


We've had our mortgage with them for around 13 yrs now and, like you, are half way through a 5 yr fixed rate - why anyone in a similar position would move is

We've never had any problems with them, CS has been good when we've had to use it - there's an awful lot of speculation and assumptions flying around

I guess to some here I'm one step up from council scum
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Old 05-08-2008, 14:01   #243
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The issue is when you finish the fix rate deal (before then as posters above say you would be crazy to leave as anywhere else would be much more).

Because they no longer have the capital to fund new mortgages when your fixed rate term expires they want you to go elsewhere. If you are considered a "good" risk guess LTV below 80% or so they IIRC they have a deal with HSBC who will take you on and then NR get a commission for introducing you. Obviously you are free to go elsewhere if cheaper offers available to you.

The problem cases are if you don't move as I believe you will now be moved to the standard variable rate which is much higher than other lenders Halifax, Abbey etc because they only people who are staying are those who can't get remortgages elsewhere e.g. the 100% and 125% LTV people.

I also thought their lending practices where extremely high risk. A friend took out one of their > 100% LTV deals as had no deposit but then all the work they had to do on their flat plus stamp duty, legal fees etc was added to the loan so must have ended up at in the 110% to 120% LTV range. Their flat has now I guess fallen at least 10% so their LTV must be even higher.
No other lender on a remortgage would touch them with a bargepole in current climate.
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Old 05-08-2008, 17:41   #244
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So the taxpayer has to stump up Ł3bn to make up for bad management. Havent we got better things to spend our money on ?
Well done Gordon
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