Northern Rock mortgage arrears double

The troubles at Northern Rock could continue as it has been revealed that the bank's arrears doubled in the first six months up until June 2008.

Furthermore, Goldman Sachs has warned that the taxpayer could be out of pocket to the tune of £1.28 billion as a result of the government's decision to nationalise the bank, the Banking Times reports.

According to Goldman Sachs, which was appointed to advise ministers in Northern Rock, nationalisation of the bank will cost at least £450 million for taxpayers.

The news source reports that this information was made aware to the Treasury in February and the nationalisation of Northern Rock is now the subject of a judicial review.

It is also estimated that one in five of the bank's customers will be facing negative equity on their property in 2009.

Northern Rock was nationalised in February 2008 after the lender struggled to survive the economic problems caused by the credit crunch and irresponsible sub-prime mortgage lending in the US.

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