Around 32,000 borrowers still own less than a quarter of their house, and 2,532 are more than three months behind on their payments, owing £407.5million. Liberal Democrat leader Sir Vince Cable said last night: ‘The run on Northern Rock marked the start of the biggest economic disaster in our lifetimes.
‘It’s an example about the potential catastrophe if the industry isn’t properly regulated in the interests of financial stability. Enormous numbers of people have been ruined as a result of reckless lending for which they ultimately paid a heavy price.’
The Newcastle-based lender’s collapse was followed by the failure of Lehman Brothers in the US, and the taxpayer-backed rescues of Lloyds and NatWest owner Royal Bank of Scotland. The Rock was widely seen as the nation’s most reckless lender, doling out around £7billion of ultra-risky debt in 2005 alone, much of it to first-time buyers.
Some Northern Rock mortgages have gone into default, yes. Some mortgages from all sorts of lenders have gone into default.
The question we’re interested in is whether the rate at NR is higher than at other places. Which is, of course, the one number we’re not given here.