New fears over Northern Rock debts

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

More than 70% - or £53 billion - of the beleaguered firm's mortgages are owned by a Jersey-based offshore company, The Guardian said.

The Newcastle-based lender uses a web of offshore companies under the Granite name for fundraising based on its mortgages, with the Bank of England's emergency lending also secured against its home loans.

But the complexity of the system means it is unclear how much of the assets the Bank would have a claim to if Northern Rock was wound up.

Investors in the bank's mortgage-backed fundraising - known as securitisation - could also have a claim on the mortgages, the newspaper adds.

Northern Rock, which was not immediately available for comment, has also seen a sharp rise in mortgage arrears over the past five years as it aggressively expands its mortgage business.

Around 10,000 customers with mortgages worth a combined £1.2 billion are now in arrears, compared to 2,500 with mortgages of £168.8 million at the end of 2003, the report says.

The lender - at the centre of the UK's first bank run for nearly 150 years in September after it was forced to seek emergency funding - has also become more exposed to a fall in property prices.

The value of Northern Rock's mortgages where its loans account for more than 90% of the property has spiralled from £2.7 billion three years ago to £16 billion by September this year.

Nearly 2,500 mortgages worth £263 million were in excess of the value of the property.