New Employees At Northern Rock To Aid Debt Management Department

Fri, 30 May 2008

Hundreds of new staff are being taken on board at Northern Rock to help cope with an expected flood of customers experiencing difficulty in making their mortgage repayments, according to reports.

An internal memo from the nationalised lender states that despite plans to cut more than 2000 jobs, it is also looking to increase the number of people in the debt management department from 176 to 444.

Chairman Ron Sandler previously outlined his intentions to decrease the number of Rock customers in order to get it back on a more sound financial footing, and said such a move would involve advising thousands of people to look elsewhere for new mortgages .

But according to Michael Taylor, member of economic forecasters Lombard Street Research, a severe slowdown in the UK housing market would lead to the company having to deal with an even greater number of borrowers struggling to meet their mortgage repayments .

Speaking to BBC Radio 5 Live, he explained: "Their strategy was to persuade people to remortgage elsewhere but if the borrowers are in trouble, they won't be able to, and that's why they're gearing up with lots of debt advisers."

He added: "As Rock is now essentially owned by the taxpayer, the problems of customers falling badly into arrears could quickly become a major political crisis."

"They don't want to be seen to be taking lots of borrowers to repossession courts. As soon as they repossess a home, it'll end up in the papers and look very bad indeed."
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