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a number of banks and building societies have either merged
or been taken over especially since the start of the credit
crunch.
The credit
crisis in the UK is of course still continuing while the rest
of the G20 nations have all eventually come out of the recession.
The collapse
of The Northern Rock was the first and biggest collapse of
any major lending institution.
Savers
throughout the UK were reduced to a state of panic due to
what was occurring at The Northern Rock and many thousands
waited outside all their branches for hours to withdraw their
savings in case they were lost for ever.
The Government
took over the ailing society and no member of the public lost
out as a result.
The RBS
became another victim of the recession. Having lost millions,
it like The Northern Rock, had to be saved by the UK tax payer.
The recession
was to a large extent caused by the reckless lending in loans
mortgages and remortgages by these very banks.
Prior
to the credit crunch 125% mortgages and mortgages were readily
available from The Northern Rock. This meant that a mortgage
or remortgage borrower could borrow up to 25% more than the
property was worth.
This was
all very well when property prices were rising at a fast pace,
but when prices started to fall the society really was in
serious and deep trouble.
Individuals,
who in the 60's would have been regarded as little more than
crooks in their property development activities, were until
recently being granted loans and commercial mortgages by RBS
and HBOS.
All this
has been tightened up and such things as self certifications
of income for self employed loan, mortgage and remortgage
borrowers is no longer available.
There
are always changes made in underwriting criteria when banks
and building societies merge or experience a take over.
With today's
announcement of the merger between The Chelsea Building Society
and The Yorkshire it is to be anticipated that underwriting
criteria changes will occur with them as it always has with
other mortgage lenders in the past.
Of course
even before the recession mergers and take over’s did
occur, most notably when the Spanish giant, Santander, took
over The Abbey National Building Society and later on The
Alliance and Leicester also became Spanish owned.
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