Anyone else been put in the Northern Rocks "bad bank"

[starmucks]

Just found out today after ringing the NR that our mortgage has been placed in the bad bank, which means that we can't remortgage with them. They were supposed to notify us by letter last month, but clearly couldn't be bothered. We are currently on their SVR. I am more than slightly miffed because:

1. We bought in 2005 with a 90% loan to value.

1. Between 2005 and 2008 we paid down the mortgage reducing the LTV to 75% based on the original purchase price.

1. In 2008 we needed to move in a hurry and decided to let out the property as nothing was selling. At this point the bank had already imploded and they weren't offering any products. They advised to move to a "consent to let" on our original mortgage, and shift it from repayment to interest only. Once the fixed rate term ended we moved to the SRV which is 4.79%.

1. Between 2008/2009 we made further down payments on the outstanding mortgage reducing the LTV to 60% on the original purchase price.

1. The current monthly rental income is 3x the interest payment on the mortgage.

So why the hell has our mortgage gone to the bad bank? Has any one else been shoved into the bad bank?

We have, but in fairness I can see why. 101% LTV bought in 2007, so it's probably now worth about 2p...

We don't have any plans to move so we're not that bothered, except that we would really like to get a fixed rate so that we know where we are for the next few years. It seems that they're not offering any new products at all.

Given your LTV, you should be able to move to a different mortgage provider reasonably easily now, shouldn't you?

One theory is that it is because they have to reduce the amount in ££?s that they have in outstanding mortgages that are considered any kind of a risk to them.

On paper buy to lets have often been considered a little more risky loans on 1st homes due to the fact that if everything goes pair shaped a person will pay the mortgage on their home first and their let property second.

Plus if they only put people in the ?bad bank? who will not possible be able to remortgage elsewhere then they won?t lose many people that way. So it?s probably nothing personal, they know you can, and probably will remortgage.

So even though you have throw a good amount of money at your mortgage NRock will probably want you to pay the extra to make the risk (as they see it) for them worthwhile or go. Not very nice, buy hey, banks aren?t really at the moment!

It?s a pain but a remortgage might be worth it!

Well today proved to be interesting. I spoke to a really small lender which seemed to be offering competitive rates but we failed their criteria because...wait for it...we are currently renting the home we are in. So effectively we failed because we don't have more debt!!!! We passed on all the other stuff. Hilarious.

DH spoke to a broker today who seems to think that he'll be able to get us a fixed rate deal lower than the current rate we are paying, and without a stupid fee attached.

Still fairly incensed with NR. The selection process seems to have been pretty arbitary. And they are offering new products to those who've gone into the good bank. They have too as they need to be a proper function entity by the time of privatisation.