Northern Rock recently announced excellent results for shareholders,
and their board should be proud of the profits they have made.

In the shadow of the mountain of lenders like Northern Rock, is a
hidden story that one day soon will be told on the backs of a tsunami,
that will wipe out many families, homes and lives when the housing
bubble bursts.

Northern Rock has taken a significant share of a market of deluded and
greedy home owners, who have involved themselves well beyond their
financial means in a housing market that is about to turn against them.

Northern Rock offers first-time buyers loans six times their income and
125% the value of the property. It is all easy money. The interest
rates being low and a nice earner can be made from buying and selling
houses to fund higher credit card spending and more loans.

Lending by Northern Rock has gone up  26% in the last 3 months,
assisted by a still strong housing market. Here is the catch. Most of
those "new loans" are remortgages. In reality the customers are in
financial distress and are reorganising their finances by taking out
mortgages on top of mortgages. Within the figures by Northern Rock is a
hidden story of increased bankruptcies and repossessions. Northern Rock
has a way of keeping the profits coming in as they will seek "quicker
crystallisation on defaulting loans where they are higher-risk loans;"
in otherwords default on a payment to Northern Rock and say goodbye to
that nice expensive house that will be repossessed quickly, sold off
cheaply, whilst the remaining cash is taken when the greedy customer is
shoved into bankruptcy. You got to laugh, I did!

Mabon Dane