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Shares in one of the UK's largest mortgage lenders, Northern Rock, have fallen by 20% after the Bank of England decided to give it emergency funding.But experts say it does not mean Northern Rock, which has £113bn in assets, is in danger of going bust.
The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer.
[news.bbc.co.uk...]
Does anyone have a mortgage or savings there?
I have an online savings account that I couldn't access last night or this morning. They aren't answering the phones either.
All of the "experts" are saying that the bank won't collapse, but they probably don't have any money there!
Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
From "David Copperfied" by Charles Dickens
One family took out a mortgage 8 times the family income and are now struggling to pay it.
What on earth were they thinking of?
Speaking as someone who doesn't own a property, and who's watched friends' property values shooting up I can understand this reasoning.
It's pretty much the what defines a bubble I guess.
What on earth were they thinking of?
They probably thought or were told that the house price will go up 20-30% a year, so they will have a lot of positive equity, so even if they have to sell the house they will still make money, so in this instance it is in "their interest" to get as big morgage as possible because this will increase their profits! Naturally all this is based on assumption that 20% house price growth will never end.
