Northern Rock

[sqad617]

Presumably people who were buying their home with a Northern Rock Mortgage would have deeds to their home. If Northern Rock was liqidated, would those deeds guarantee that the householder would be the legal owner of the house even if there was still an outstanding mortgage to pay on the house OR is the house still the property of the bank and would form sellable assets to the liquidater? i.e the householders would be made homeless and the house returned to the bank for resale.

[Mully79]

I don't know the answer to this one, but considering I have a large mortgage and personal loan with said company, it would be a dream come true if they went bust and I no longer owed anything. Pigs may fly!!!

[Ethel]

The householders would not be made homeless.

Mortgages are a huge asset and they would be sold on so would still have to be repaid.

You seem a bit at odds with the principles of a mortgage. The householder is the legal owner of the house, whether there is a mortgage or not. His name will show on the Registered Title as the legal owner.

The mortgage company has an interest registered on the Title which prevents the householder selling the property and running off with the profits.

If the householder falls into mortgage arrears, the mortgage company's registered interest gives him the right to apply to court for a Repossession Order.

The mortgage company usually has amongst the terms and conditions the right to sell the mortgage to another company.

Should Northern Rock be liquidated, the Official Receiver would be duty bound to realise the company's assets and that includes selling on the mortgages. There would no shortage of takers.
Any other company that buys the mortgage will be bound by the existing terms and conditions.

[sqad617]

Thanks Ethel for your usual helpful and clear answer. BUT more help needed. If on selling on the mortgages there would be "no shortage of takers" why didn't any one come and snap them up when the Government offered them to the private sector? Richard Branson had a sniff, but didn't take it up. NOW, if the private sector didn't want to know and say the Government refused to inject more cash and the Liquidater did his job who would the home owners pay their mortgage to.(bad grammar, sorry)
Presumably they would own a house, no need to pay mortgage, but unable to sell their house.

[Ethel]

The mortgages would always be bought - don't worry about that.

If the government hadn't injected the cash, then the mortgage side of the business would have been sold (eventually) to the highest bidder, who would of course eventually make a lot of money. It would be another financial institution that bought them.

The situation would NEVER arise where you don't have anyone to pay the mortgage to.

The mortgages would not be sold individually, but the mortgage side would be sold either wholly or in very large chunks.
Billions of pounds.

[sqad617]

Many thanks Ethel.