Sunday, September 23, 2007

Northern Rock Shocker- Taxpayers to be fleeced ad nauseum

Anybody watching the Governor of the Bank of England and his associates being questioned by the Commons Treasury Select Committee can hardly retain any faith in either the UK's financial system nor their elected representatives. The report in this morning's Sunday Times, linked here, nevertheless still has the ability to shock even this old cynic! I quote its opening:

Northern Rock still lending ‘recklessly’

Northern Rock stands accused of “reckless” lending after it emerged this weekend that the beleaguered bank is still offering mortgages of six times salary to potential borrowers.

Despite provoking the worst banking crisis for decades, the bank last week offered a reporter posing as a first-time buyer a £180,000 mortgage even though he had a salary of only £30,000.

The loan was at least £30,000 more than other leading lenders were prepared to offer. Repayments for the loan would have accounted for more than 60% of the fictional buyer’s take-home salary.

The reporter, posing as another potential customer, was also offered a so-called “negative equity mortgage” worth 117% of the value of the property he claimed to be interested in buying. The mortgages offered by other banks to the same potential borrower were significantly lower.


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