Bailout for Mortgage Companies

Yesterday, the bank of England  offered a scheme to bailout the banking sector by offering to exchange ‘unpopular’ mortgage debt for government backed securities.

The money markets have struggled since last summer and the American subprime crisis. This has led to a shortage of funds for mortgages and increased cost of mortgages.

I wrote an in depth analysis here: – Bank of England Bailout for Mortgage companies.

It is not certain how successful it is going to be. Abbey announced this morning that they will increase their mortgage rates anyway.