Thursday, 21 July 2011

Warning - Northern Rock Mortgagees

If you hold a Northern Rock Mortgage beware you could be about to lose your house.

We all remember the scene in 2007 when there was a run on the Northern Rock Bank.  Queues of people waiting around the country to get into the bank and withdraw their money.  It was at this time the government stepped in and nationalised the bank.

As a property investor. my husband, had a large portfolio of mortgages with Northern Rock at the time, he has since reduced the number of mortgages held with them but still retains a substantial portfolio mortgaged to Northern Rock.

Since we have had the lib/con government the bank has been split into two separate divisions.  One holding all the customers deposits and one holding all the mortgages.  An organisation UKAR is now responsible for managing the Northern Rock mortgage portfolio under the new name of N-RAM.

In June we received a letter from N-RAM stating they wanted to revalue our portfolio and have a meeting to discuss our exit strategy.  The meeting subsequently took place with our accountant present.  Through probing questions from our accountant it was admitted that N-RAM want the portfolio revalued, if property prices have dropped since the last valuation - basically we all know they have dropped since 2007 - and LTV is higher than the terms and conditions of the mortgage agreement then N-RAM are claiming breach of contract and will be forcing the sale of the properties.

I don't know how many mortgages held by N-RAM would fall into that category but imagine what that is going to do to the housing market having all these properties repossessed and sold off on the market.  I can see house prices plummeting and giving N-RAM more opportunity to dispose of all the mortgages it holds in a very short time frame.