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Rock reveals 8,500 Together borrowers in arrears, 3000 repossessed in 2008

Northern Rock has revealed the full extent of the problems facing its Together mortgage borrowers with as many as 8,500 slipping into arrears and almost 3000 being repossessed in 2008.

At a press conference this morning, Northern Rock chiefs admitted that the posted losses of £1.3bn were not the bank’s only problems; in 2008 17,500 of its borrowers fell into arrears of three months or more, half of which were Together borrowers, or 4.53 per cent of the Together book.

It also admitted that one in ten of all repossessions in the UK in 2008 were from the Northern Rock book – using CML statistics that could be as many as 4000 repossessions, 70 per cent of which were Together customers.

It also admitted that more than a third of the Northern Rock mortgage book is now in negative equity – 170,000 homeowners. Although this does not signify immediate problems, it means hundreds of thousands of Rock customers are affectively stuck with the lender.

Northern Rock also revealed that 30 per cent of its 4000 repossessions came about from borrowers simply handing back their keys.

Chief executive Gary Hoffman says: “There is a notion out there that all Together loans were written at 125 per cent, that simply isn’t true. The typical Together loan was written at 90 per cent, the secured element, and then there was another £15,000 of unsecured lending done on top of that, taking to over 100 per cent.

“Repossession is the last resort, we will not reposses unless a customer has been in at least six months arrears – on average we have been working with customers for 15 months before we take them into repossession. We have been working with customers in difficulty and where appropriate we have rescheduled repayments.

“The way in which customers give up the keys is not appropriate. It’s always better to talk to us rather than not talk to us.”

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