Northern Rock “Together” mortgages push up arrears
Blighted by its “Together” 125% loan-to-value mortgages, Northern Rock has revealed that residential mortgage accounts over three months in arrears rose to 3.92% in the six months to the end of June.
The proportion compares with a national average of 2.39% and is up from 3.67% at 31st March 2009 and 2.92% at 31st December 2008.
Excluding “Together” loans, residential mortgage accounts over three months in arrears stand at 2.85%.
However, the lenders says efforts to help customers in financial difficulties have led to a fall in repossessions with its stock of properties in possession down to 2,522 at the end of June, compared with 3,620 in December 2008.
Following its near collapse, Northern Rock effectively withdrew from the mortgage market and only began offering new mortgages to existing customers last month.
The move followed a gap of well over a year when borrowers coming off fixed deals either reverted to the Rock’s standard variable rate or were forced to go elsewhere.
In April, the bank announced plans to increase lending over the next two years to £14 billion but is unlikely to come anywhere near its target.
The Rock passed into public ownership in February 2008 has just posted a loss of £724.2 million for first half of 2009, rising from a loss of £585.4 million in the first six months of 2008.
Its debt to the Government stands at £10.9 billion and more supports from the taxpayer is expected in the autumn, once EU regulatory approval is secured.
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