Mother-of-three is first Northern Rock borrower to be thrown out of her home by the G

[Legal Beagles]

This is the mother of three whose plight symbolises the disaster of the Northern Rock bank collapse. Christina Georgiou's home is being repossessed because she cannot afford to keep up the repayments on her £360,000 mortgage.

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[enaid]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

Mother-of-three is first Northern Rock borrower to be thrown out of her home by the Government

This is the mother-of-three whose plight symbolises the disaster of the Northern Rock bank collapse.

Christina Georgiou's home is being repossessed because she cannot afford to keep up the repayments on her £360,000 mortgage.

And every day, there will be more like her, facing a bleak future after being thrown out of their homes by the Government because of the disaster which overwhelmed Northern Rock.


Bleak future: Mrs Georgiou outside the home she has lost because she could no longer afford to pay the £360,000 mortgage
Today Mrs Georgiou becomes the first victim to go public out of the thousands of borrowers the taxpayer-owned bank is evicting as its reckless lending comes home to roost.

Her plight is symbolic of the crisis and, at a time of economic gloom, the sight of a Labour Government effectively forcing people from their homes is likely to be politically explosive.

Mrs Georgiou and her three children have a month to get out of their five-bedroom home in Goff's Oak, Hertfordshire.

The 38-year-old and her husband, from whom she is now estranged, took out a loan for around £300,000 with Northern Rock in 2006.

They were given the money despite relatively low earnings - Mrs Georgiou earns less than £100 a week working part-time in a cafe and her husband is a taxi driver.

In an astonishing twist, they were handed an extra £60,000 by Northern Rock on September 20 last year. This was days after customers queued outside branches in the first run on a British bank for 100 years.

Despite begging £27billion from the Bank of England, the former building society was apparently handing out taxpayers' money to borrowers without any proof they could keep up with the repayments.

Mrs Georgiou knows she is not without blame. She said: 'People have to be responsible for their own actions. But if a bank is saying, "You can have all this", it is very tempting.

'For this generation, it has become too easy. Northern Rock should have done more checks. They just willy-nilly gave money away. Yes, we are responsible, but I don't think there are enough regulations.'

The Liberal Democrats said her case was an example of the 'grossly irresponsible' lending of 'toxic' loans to people who never had a hope of repaying their debts.

It is estimated Northern Rock is repossessing six family homes, possibly many more, every day. Tory Treasury spokesman Philip Hammond said: 'A rising toll of repossessions is the human price we are paying for the failure of Gordon Brown's banking regulatory system to prevent irresponsible lending.'

Mrs Georgiou claims the bank did not ask for any proof of her or her husband's income when they asked for the extra £60,000. With her low earnings, Mrs Georgiou's repayments are totally unaffordable.

She has not paid a penny of her mortgage debts since February. To make matters worse, they jumped by £800 to a £2,300 a month after her two-year fixed rate loan came to an end this month. The house was valued at around £385,000 in April. Since then the market has fallen and the costs of the looming repossession are likely to mean Mrs Georgiou's debts are greater than the value of the home.

She said: 'I was extremely concerned at the time we signed the papers [for the £60,000 loan.] I kept saying the bigger the loan, the bigger the fall. But the property market seemed to be going up.'
David Hollingworth, of mortgage brokers London & Country, said: 'There are two parties involved in all mortgages. If you borrow too much money, you can be contributing to your own downfall.'

Mrs Georgiou has registered for council housing and is looking for a home to rent in the area to maintain stability for her children who attend local schools.

She said: 'I don't want to be a burden, but I'm in dire straits now.'
Experts fear Northern Rock's cavalier approach to lending before its implosion last summer will claim thousands more victims.
Before the bank was nationalised in February, it was handing out 'Together' loans worth up to 125 per cent of a property's value. This meant the homeowner was plunged into negative equity - when the size of the mortgage is larger than the value of the home - from day one.

A Northern Rock spokesman said he could not discuss specific cases.

But he insisted: 'Credit quality at Northern Rock remains tightly monitored and controlled. We carry out checks on applications that may not be evident to the applicants.'

He added: 'We continue to treat our borrowers fairly and in the light of their individual circumstances, with possession as a last resort.'

[Amethyst]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

Taxi driver must have earnt a fair bit - conveniently they havent mentioned that - they have concentrated on her £100 a week. The situation is more for them seperating, thus not getting a new fixed rate deal, than anything else.

I am not unsympathetic whatsoever but this is a very expensive house and is a shock horror £360k against £100 a week shock factor spin press angle which I don't think helps people.

Story about a couple in same position now as they were when they took out the mortage on an average mortage 100%+ value etc not being able to get a new fixed rate because the lenders wont give it to them now where they would before and then not being able to keep up payments would be more typical and make a better story IMO.

[enaid]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

I am also surprised at them being able to borrow all that. As a taxi driver he would be self employed and have to show his accounts etc so maybe he was earning a few bob.

As for the story you would rather see, I,m sure there will be one along real soon.

[Amethyst]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

I am sure there will be lots already - but they won't make news and will just be sucked into statistics if the press cant get a daft angle on it like this one. Is just sad. Cause people will read that and think ahhh well her situation isnt ordinary I dont have anything to worry about etc.

[scoobydoo]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

I agree that you may not be getting the full story however he must have been earning a hell of a lot to justify a mortgage of that size! Or it is a case of irresponsible lending in my eyes . Especially to lend another 60,000 at time when house prices were unstable.

It would be interesting if NR had to prove their paperwork to sow they could afford the mortgage

Not takng the responsibility away from the borrower - but think the BS seem also partly to blame here.

[Amy]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

He wouldn't necessarily have had to show payslips or accounts to gain a mortgage.

He could have taken out a self certified mortgage. He probably exaggerated his earnings and NR would not check, but the mortgage would be at a higher interest rate.

[Amethyst]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

my mortgage is a self cert. I should never have been given it but I could have got more (as much as I wanted really).

Hard to say without dropping self in the poo really isn't it.

[scoobydoo]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

Yes but was it not the case that here were financial institutions fined recently as they could not provide the written evidence that they had checked that the borrowers could afford the loan.?

Again I am not defending those that borrow these amounts ( people in glass houses etc)

However I still feel that the institutions should be held partially responsible - fining them does not help those losing their houses and the large loans fueled house price increases as well.

in my case as an ex BS employee I was and am still amazed at the salary ratios I have been offered. but when we took out our fixed rate mortgage I did calculate if the rate increased by 2-3% we could still afford the MP - however although I also allowed for bigger fuel bills I did not allow for such an increase in the price of oil central heating. You can not calculate for all eventualities.

But I would still like to see more accountabiity for reckless lending - as far as borrowers go I am sure a lot are learning their lesson the very hard way!

[Amethyst]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

Agree with you completely scoobs. Borrowers have to take some responsibility if things go pear shaped - like you I checked if I could afford it at a couple percent more (think I based stuff on 7.5% cause rates were daftly low at the time) I still struggled and had to switch to a 50% interest only mid way through. but was my choice, my ENCOURAGED by the broker, to exagerate and luckily the house i wanted wasnt excessivly expensive. I'm selling now but not because of affordability - its about 50% of income goes on mortgage tho and if that goes up much more it would have ended up that way. BUT they learn the hard way........lenders hardly get a scratch. IMO.

[madbutterfly]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

I wonder what they did with the £60k they borrowed, they stopped paying in Feb - so used £60K of borrowed money in 5 months.

[scoobydoo]

Re: Mother-of-three is first Northern Rock borrower to be thrown out of her home by t

Yes I wondered that - and if that was not so long ago and now they are estranged? Maybe they borrowed it to keep up payments ? but then split?

I just also think it is wrong to lend the additional monies without a further valuation.

Today as well all the headlines are "end of fixed rates" Why do the press have to scaremonger so much. in the long run I bet they will be back eventually. This is a blip ( a big and painful blip ) we have had them before and we will have them again and we may all have learnt a valuable lesson - But in the meantime we need to think of better ways to help those who have been caught out through no fault of their own.