Friday, 20 March 2009

I can't take anymore of this.....

"At 31 December 2008, Northern Rock’s high loan-to-value Together mortgages, represented around 30 per cent of the mortgage book, about 50 per cent of overall arrears and 75 per cent of repossessions. Northern Rock continued to write these high risk products during the period it was receiving emergency support from the taxpayer, albeit at a reduced volume compared to the period prior to September 2007."

National Audit Report on the Nationalization of Northern Rock

I can't go on. I can't read any more of the NAO report on Northern Rock. I got as far as page 33 and I then read the above paragraph. I had to stop; the incompetence: the stupidity; the criminal waste of taxpayers money; it is just too much to bear.

The "Together mortgage" put borrowers into a 25 percent negative equity position from the moment they signed the loan documents. Moreover, 30 percent of the loan was unsecured. As the NAO report confirms, this mortgage generated huge arrears and massive losses.

By the time the bank collapsed, everyone understood the suicidal stupidity of "Together mortgages". Everyone, except the Treasury, the Bank of England and the FSA. Between September 2007, when the bank started to receive taxpayer's money, and February 2008, when the bank was finally nationalized, Northern Rock originated almost ₤2 billion of new Together loans.

Why didn't somebody stop them? Didn't anyone bother to consider the madness of handing out public money to this bank, who then used that financing to originate further billions of the most outrageous mortgage product on the planet? What are these people taking? Do they not think?

Over the last two years, this country has built up an horrific record of catastrophic financial mistakes - RBS, NRK, the Lloyds-HBOS merger, the Bradford and Bingley, Goodwin's pension - just to mention a few. The taxpayer has committed over a trillion pounds to supporting the UK banking sector. It has got to stop. We are being improvished by stupidity.

9 comments:

K T Cat said...

No one should be allowe3d to fail. Ever.

That is, until we all fail together as a group.

CityUnslicker said...

I think you are left with a guido fawkes solution.

nationalising banks has made things worse for sure.

Mark Wadsworth said...

It does sometimes make you lose the will to live ...

Anonymous said...

I wonder if we'll ever get to read the minutes of the discussions that went on behind the scenes. I suppose it's a mixture of incompetence and corruption, but I'm almost starting to wonder if David Icke was right. Maybe our rulers are green lizards, destroying our economy to make it easier to take us over.

Anonymous said...

The Government is still pushing 100% lending into the market.

Under the various "Homebuy" schemes, a home buyer can take out a loan from the Government of up to 50%* of the purchase price, and then use this loan as a deposit, allowing them to get a mortgage for the balance. This allows people to buy without saving or investing a penny of their own money, and puts the taxpayer directly on the hook in the case of non-payment or default. The Openmarket Homebuy scheme allows buyers to select any home they wish which is available for sale. In an added twist, the scheme is actively targetted at people who simply can't afford to buy.

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_066591

If you can't afford to buy a home, the 'Open Market HomeBuy' scheme can help you to get a loan alongside a regular mortgage.

http://campaigns.direct.gov.uk/ontheladder/index.html

[Openmarket Homebuy] Offers an equity loan for up to 50 per cent of the property's value to run alongside a regular mortgage. The loan can be used as a deposit and is repaid when you sell the property. You may buy a property on the open market and will be the sole owner.

dearieme said...

Rope!

Alice Cook said...

dearieme,

Who needs the rope?

Alice

Anonymous said...

Unbelievable. What comes next? How do they trump this?

look said...
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