Billions More Poured into Northern Rock
07/08/2008
The Government has pledged a further £3.4bn of taxpayers' money to the struggling bank Northern Rock, which has lost nearly £600m.
So far this year, the bank has repossessed 3,710 homes: nearly double the number over the same period last year. Ron Sandler, the executive chairman of Northern Rock, revealed that 70% of this year's repossessions involved customers who had been given the controversial Together mortgage, which allowed people to borrow up to 125% of the property's value.
Liberal Democrat treasury spokesman Vince Cable, said: "The Chancellor and the government were totally irresponsible for failing to heed my warnings from last October that the bank should be stopped from giving out 125% 'Together mortgages'. These shocking figures show Northern Rock has £6.3bn in unsecured loans. It was clear even then that they could never be repaid in a falling housing market."
Cable went on to say that Alistair Darling has misled parliament when he pledged that taxpayer loans would be secured on mortgage assets, following the decision to turn £3.4bn of the loans into shares.
"Alistair Darling assured parliament that taxpayer loans to Northern Rock would be fully secured on mortgage assets. This is clearly not true," said Cable.
So far this year, the bank has repossessed 3,710 homes: nearly double the number over the same period last year. Ron Sandler, the executive chairman of Northern Rock, revealed that 70% of this year's repossessions involved customers who had been given the controversial Together mortgage, which allowed people to borrow up to 125% of the property's value.
Liberal Democrat treasury spokesman Vince Cable, said: "The Chancellor and the government were totally irresponsible for failing to heed my warnings from last October that the bank should be stopped from giving out 125% 'Together mortgages'. These shocking figures show Northern Rock has £6.3bn in unsecured loans. It was clear even then that they could never be repaid in a falling housing market."
Cable went on to say that Alistair Darling has misled parliament when he pledged that taxpayer loans would be secured on mortgage assets, following the decision to turn £3.4bn of the loans into shares.
"Alistair Darling assured parliament that taxpayer loans to Northern Rock would be fully secured on mortgage assets. This is clearly not true," said Cable.
