The number of Northern Rock borrowers more than three months in arrears on their mortgage repayments has risen fivefold, the bank has revealed.

Confirming a loss of £1.4 billion for 2008, the state-rescued bank said that 17,264 homeowners were more than three months behind on repayments, up from just 3,492 a year ago. Of its 585,000 borrowers, 170,000 were now in negative equity, with homes worth less than their mortgage.

One third of Northern Rock’s £66 billion loans were backed by insufficient security because of falling house prices. An additional £6.8 billion of mortgages would go into negative equity if house prices continued to fall by 5%, and £12.6 billion of mortgages if prices slumped by 10%. The figures released yesterday point to another explosion in home repossessions, analysts say.

The increase in arrears was mainly down to Northern Rock’s now infamous ‘Together’ mortgages, which lent borrowers up to 125 per cent of their property’s value including an unsecured loan.

PricewaterhouseCoopers, the bank’s auditor, expressed doubt over Northern Rock’s ability to continue as a going concern if the European Union ruled out plans to convert up to £3 billion of government loans to the bank into fresh equity capital.

Yesterday it was revealed that the bank’s disgraced former chief executive, Adam Applegarth, had received a £109,000 pension top-up from the taxpayer-funded bank in addition to his existing severance payments of £1.16 million announced a year ago. The bank said that because he had failed to get a new job, it had had to pay his is full severance entitlement, which amounted to £732,000 in 2008. Mr Applegarth, who is 46, is entitled to retire on a £305,000 a year pension from the age of 60.

This entry was posted on Wednesday, March 4th, 2009 at 9:22 am and is filed under Banking, Credit Ratings and Reports, Housing Market, Loans, Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.