The Dodge Challenger Message Board

How's things going over there in England? Sure you heard about the run on Northern Rock Bank by now. Hope none of you have money in that mess. Check out this site. Somewhat bias but so far right on with what's going on over here in the U.S.

BTW: The moderator happens to reside in England.

http://housingpanic.blogspot.com

Note: I have no special interest in the blog except gathering information.

My brother Jimmy is president of a bank here in town. He said the other night ,"we have only ourselves to blame", I think he was referring to giving loans with no money down,(first huge mistake), and lowering the earnings to debt ratio,(second huge and usually fatal mistake due to the fact that the lender is usually already "maxed" out or they wouldnt be paying that much interest for a 100% loan). 100%Mortgage loan = loaning a person,(s), 100% of said mortgage loan with NO money down! Sure it may work under ideal conditions but get behind on your bills or lose your high paying job for one that pays less,or have your adjustable rate increase 2-6 % overall, or have your loan purchased by another institution for a higher rate, ect.. it wasnt too long ago when one needed 20% down minimum to buy a home.............

it wasnt too long ago when one needed 20% down minimum to buy a home.............

Those days are back. Watch home sales for August and September since the tighter lending practices have started going into place. A spike in adjustable rates are due between now and the end of the year too. The sh.. will hit the fan.

Northern Rock are a very big bank (based 10mins drive from my house) but most of their business is just mortgages. The money they lend out comes mostly from the international money lenders.

Because of the trouble in the USA no-one is lending money. So Northern Rock asked the Bank of England if they could borrow money from them instead if they feel they need it.

This is how this bank works an in no way reflects any problems with the bank.

However people panic as they do. Including investors.
So now the share price has gone down 30% leaving the bank open to hostile take-over bids. That could mean job losses in my town if that happened.

Plus the bank sponsors Newcastle's Soccer team, Rugby team and (I think) Durham Cricket team. So we don't want to loose that!

All because of peoples lack of understanding of how the bank works.

Personally I don't like Northern Rock anyway. The Nationwide Building Society is MUCH better.