- Apple Surpasses Nokia as Top Handset Maker by Profit
- In This Relay-Race Market, Who Gets Baton Next?
- Workers Staying Put at Their Jobs as Jobless Surges
- Three Things the US Can Do To Stop the Dollar's Decline
- Toll Brothers: More Contracts Signed, but Sales Down
- Fed's Lacker: US in a 'Good Place' With Inflation
- Bear Stearn Fund Managers Not Guilty on All Counts
- Ponzi Proceeds: Bidding on Madoff's Toys
- Commodity ETFs: Returns May Not Match Expectations
- Beware of 'Trampling Effect' When Market Tops: Manager
- Gold Heading to $1150: Art Hogan
- Starbucks Brews Up Growth
- Farr: An Extended Period—No Fat Lady in Sight
- More Upside if S&P Passes This Number: Market Pro
- Murdoch Lashes Out At Google
- Fighting The Flu Vaccine Critics
- Nov. 10: Unusual Volume Leaders
- Shadow Inventory Dwarfs Loan Mods
MOST SHARED
- Herbalife Vs. Hedge Funds
- Apple Surpasses Nokia as Top Cellphone Maker by Profits
- JPMorgan Chase to Hire 1,200 Mortgage Officers
- Gold Heading to $1150: Art Hogan
- Parsing Treasury's Loan Modification Report
- Adobe Cuts 680 Jobs, to Take Charge
- Cramer Jeers J&J, Applauds Abbott
- Toll Brothers: More Contracts Signed, but Sales Down
- Bear Stearn Fund Managers Not Guilty on All Counts
UK building society Nationwide is offering 125 percent mortgages to its existing customers that have fallen into negative equity and need to move home.
The mortgage lender insists the move does not signal a return to the risky bank lending which caused the subprime crisis, even though the new loans would be worth far more than the value of the homes they use as collateral.
“Nationwide is a responsible lender and our negative equity policy is an appropriate and prudent response to market conditions and demonstrates our continued commitment to supporting our customers,” Andy McQueen, director of mortgages at Nationwide, said.
The underwater customers would be able to carry over their negative-equity loan when they move home, but only customers that meet Nationwide’s “strict lending criteria” and have a good credit record will be accepted, the lender said in a statement.
Nationwide, which has not advertised widely its offer, said it does not anticipate high levels of demand for the service and hasn’t seen much pickup since the product’s launch in June.
![]() |
Under the new scheme, customers will be able to replace their existing mortgage with a new loan of up to 95 percent of the property. But an additional 25 percent of the loss incurred from their existing property would also be tacked on, pushing the loan over the 100-percent mark.
Borrowers would need to stump up a 5 percent deposit to secure the new mortgage.
The interest rates available on the main loan match those available to customers whose mortgages are not under water and who are moving home with a 95 percent loan-to-value ration, Nationwide said.
Both the main loan and the associated negative equity top-up are restricted to three and five year fixed rate products, Nationwide said. Rates for the top-up loan covering 100-125 percent loan-to-value are 7.23 percent for the three-year fixed rate products, and 7.89 percent for the five-year products.
The deal could offer a lifeline to homeowners who could find themselves stuck in their current property because they are unable to sell it without incurring a huge loss, but it is unclear whether other mortgage lenders will following Nationwide’s suit.
- Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
- If you are lucky enough to have money and the time, this is a great time to see America, says CNBC's Jane Wells.
- What’s powering your microwave, fridge and computer? Part of it is fuel from Russian nuclear weapons. The NYT reports.
- One author sees lessons for you in Disney’s recent Makeover of Mickey Mouse: “Nice” doesn’t always win.
- With 123 years of history, slogans and commercials, Coca-Cola is the most recognized brand on earth.
- The opening of a virtual pet store in “World of Warcraft” could prove a cash bonanza for Activision-Blizzard.











