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National Audit Office reveals startling facts about Northern Rock

It has been revealed that government owned Northern Rock was still issuing 125% mortgages days after the government stepped in to bail out the company. This is the first of what many people expect to be a number of damning reports regarding the actions taken by the UK government in these most difficult of times. It looks as though Northern Rock was allowed to fund over £1.8 billion in mortgages, which were deemed high-risk by the government, despite being in trouble and having to be bailed out by the UK government.

It also look as if from the £1.8 billion in mortgages, which could turn out to be potentially toxic assets, approved after the initial crisis began, over 75% of subsequent repossessions relate to this period. This is a terrible indictment of the way Northern Rock was and has been run with the UK government apparently saying one thing in newspapers and doing another in the market.

Gordon Brown is currently on business in Berlin although he did give a muted response to the report highlighting the fact that things have changed since the report was produced and Northern Rock is very much on the up. Whether this will be enough to quell unrest within Parliament very much remains to be seen.

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