Rock and a hard place

The government’s £13 billion sale of ‘bad bank’ mortgages to a United States equity firm threatens the long-term security of thousands of home owners Unite has warned.

Ministers are selling the remaining stake in Northern Rock and Bradford & Bingley – acquired by taxpayers during the financial crash – to private equity firm Cerberus.

Until now these mortgages have been held by UKAR (UK Asset Resolution), the so-called ‘bad bank’ established by the government as a holding company in 2010.

It has also been announced that TSB Bank, itself recently sold to Banco Sabadell, will buy £3.3 billion of former Northern Rock mortgages from Cerberus, becoming the lender to 34,000 UK home owners.

Short-term profit

Unite regional officer Brian Cole, said: “the sale of mortgage debt for astronomical figures was one of the main causes of the financial crisis, so it’s alarming to see the mortgages of so many home owners being sold-off to an equity firm whose only interest is short-term profit.

“The finance industry doesn’t need another ‘get rich quick’ scheme.

Roulette wheel

“Our members and the thousands of home owners who rely on us deserve long-term security, yet once again their futures are being placed on the roulette wheel.”

Making clear Unite’s unhappiness at today’s announcement Cole added: “the union will continue to consult our financial workers members at UKAR and seek assurances from Cerberus over both the long-term future of staff and the mortgage book.”