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NORTHERN Rock is on track to throw 7,500 families out of their HOMES by Christmas —as it takes an increasingly hard line with those in mortgage arrears.
The state-owned lender is speeding up repossessions to try and recover some cash it is losing—but the move will cost the taxpayer £380 MILLION.
That’s on top of the £17.5 BILLION which has already been spent on rescuing and nationalising the crippled financial institution.
For the bank loses an average of £51,750 on EACH repossession, because of costs and the fact the houses are sold at a reduced price for a fast sale.
Every day TWENTY Northern Rock customers have their homes snatched off them —victims of the bank’s previously reckless lending.
Buried in Northern Rock’s annual report, chiefs admit they are fast-tracking repossessions through a “policy of rapid movement towards recovery where it is clear that the borrower will not maintain payments”.
But behind the fancy financial jargon the human cost is immense, as West Midlands couple Richard and Julie Frost know only too well.
They are among the latest casualties of the bank’s past lax lending, after losing their home last month.
Now bankrupt and living in rented accommodation with their three children, they had taken out a 125 per cent mortgage with Northern Rock in 2004 to buy an £85,000 house.
When Richard, 41, fell ill and lost his teaching job in 2006, the couple struggled to make ends meet. They fell deep into debt, and used credit cards to pay their £560 a month mortgage bill.
Then last October their repayments jumped to £760 a month when their fixed-rate deal ended.
Julie, 38, said: “That was the final nail in the coffin. We owed a total of £240,000, including £100,000 to Northern Rock. I wouldn’t wish repossession on my worst enemy. I walked away from my house in floods of tears.”
She added: “Letting the house go was the hardest thing I’ve ever done. I felt like I’d let my children down. This was their home and their security but they were going to lose it all.” Experts at money supermarket believe 5,000 families have had their homes snatched by Northern Rock since it was nationalised in February.
And that will soar to 7,500 by the end of the year.
Overall 18,900 British families have lost their homes in the first six months of the year, according to the Council of Mortgage Lenders— which predicts there will be 45,000 repossessions in 2008.
But the number could be far greater, because so many cash-strapped borrowers are clinging to their homes with their fingernails.
There are 155,600 families struggling with mortgage arrears of three months or more, including 7,796 Northern Rock customers.
Gordon Brown is drawing up an economic rescue package to try and kick-start the housing market.
It could help some of those struggling with arrears to sell up and avoid repossession.
But that is not likely to happen for months—which will be too late for many.
Rock monsters | News | News Of The World
The state-owned lender is speeding up repossessions to try and recover some cash it is losing—but the move will cost the taxpayer £380 MILLION.
That’s on top of the £17.5 BILLION which has already been spent on rescuing and nationalising the crippled financial institution.
For the bank loses an average of £51,750 on EACH repossession, because of costs and the fact the houses are sold at a reduced price for a fast sale.
Every day TWENTY Northern Rock customers have their homes snatched off them —victims of the bank’s previously reckless lending.
Buried in Northern Rock’s annual report, chiefs admit they are fast-tracking repossessions through a “policy of rapid movement towards recovery where it is clear that the borrower will not maintain payments”.
But behind the fancy financial jargon the human cost is immense, as West Midlands couple Richard and Julie Frost know only too well.
They are among the latest casualties of the bank’s past lax lending, after losing their home last month.
Now bankrupt and living in rented accommodation with their three children, they had taken out a 125 per cent mortgage with Northern Rock in 2004 to buy an £85,000 house.
When Richard, 41, fell ill and lost his teaching job in 2006, the couple struggled to make ends meet. They fell deep into debt, and used credit cards to pay their £560 a month mortgage bill.
Then last October their repayments jumped to £760 a month when their fixed-rate deal ended.
Julie, 38, said: “That was the final nail in the coffin. We owed a total of £240,000, including £100,000 to Northern Rock. I wouldn’t wish repossession on my worst enemy. I walked away from my house in floods of tears.”
She added: “Letting the house go was the hardest thing I’ve ever done. I felt like I’d let my children down. This was their home and their security but they were going to lose it all.” Experts at money supermarket believe 5,000 families have had their homes snatched by Northern Rock since it was nationalised in February.
And that will soar to 7,500 by the end of the year.
Overall 18,900 British families have lost their homes in the first six months of the year, according to the Council of Mortgage Lenders— which predicts there will be 45,000 repossessions in 2008.
But the number could be far greater, because so many cash-strapped borrowers are clinging to their homes with their fingernails.
There are 155,600 families struggling with mortgage arrears of three months or more, including 7,796 Northern Rock customers.
Gordon Brown is drawing up an economic rescue package to try and kick-start the housing market.
It could help some of those struggling with arrears to sell up and avoid repossession.
But that is not likely to happen for months—which will be too late for many.
Rock monsters | News | News Of The World
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