Northern Rock Expect A Jump In Mortgage Arrears
In line with the rest of the sector, Northern Rock is making plans for an expected increase in mortgage arrears as the slowdown in the economy continues to bite into the property market. The company has announced plans to double the number of staff in their debt management department ahead of the expected rise, although the staffing numbers will fall after a couple of years.
While just recently Northern Rock claimed to be on target to repay the debt to the Treasury sooner than initially thought, there are concerns that changing markets may scupper these plans. It looks as though the strategy of encouraging customers to find alternative arrangements may well leave the bank with a higher than average number of struggling customers. As rivals continue to cherry pick the more liquid and less risky customers there are concerns that Northern Rock could be engulfed by bad debts.
However, even the most ardent critics of the Northern Rock bailout have been surprised by the speed at which Ron Sandler has grabbed the reigns and started to make changes. While there is still a long way to go, many believe that Sandler is the best man for the job.
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