| Even though Northern Rock managed to dodge the | | | | mortgage, and the remaining 30% is offered as a |
| bullet following the timely intervention of Chancellor | | | | secured loan. As house prices accelerated rapidly this |
| Alistair Darling and his 'cast-iron' guarantee for savers | | | | type of lending has not caused concern as the value |
| funds, the criticism has steadfastly refused to subside, | | | | of the property soon exceeds the outstanding loan. |
| and now debt counsellors are fiercely rebuking the | | | | However, in the current market where price rises have |
| bank regarding its home loans lending practices and | | | | significantly slowed, and in some areas gone into |
| policies. | | | | reverse, this is now causing considerable concern in |
| The counsellors believe that many Northern Rock | | | | terms of the bank's exposure and also in the prospect |
| borrowers are set to lose their homes because of | | | | of people owing much more than their property is |
| practices involving the granting of mortgages. | | | | worth. This type of mortgage, particularly the secured |
| Beleaguered chief executive Adam Applegarth has | | | | loan element, also tends to be more expensive. |
| resolutely defended the bank against such allegations | | | | Personal insolvency expert Graham Tough, a partner |
| pointing out that his company's default rate on | | | | at accountants Martin Aikten & Co. has dealt with |
| mortgages is half that of other institutions. However, his | | | | approximately 4,000 personal insolvency cases over |
| defence has fallen on deaf ears as debt counsellors | | | | the past five years and believes that a |
| queue up to condemn the company. Along with money | | | | disproportionate amount of between 10% and 20% |
| advisors and others that deal with debt and insolvency | | | | involved Northern Rock as a major creditor. He said: "I |
| the counsellors are quick to express their concern at | | | | was concerned that Northern Rock's lending for the |
| the level and type of the bank's lending. | | | | Together mortgage would lead to more repossessions |
| The Together mortgage has attracted particular | | | | in Scotland and raised that with the bank's legal |
| criticism as it offers the opportunity to borrow up to | | | | department. Although there was an acceptance of the |
| 125% of the value of the property purchased. 95% of | | | | problem, it was made clear to me that it was a |
| the value of the property is covered by a traditional | | | | management-driven policy. |