...but building societies are crying 'foul' over unfair competition.

The Government's plan is to divide Northern Rock's business into two: one part keeping the 'good' business in order to attract private sector bidders, the other part taking care of the 'bad' business that got it into trouble in the first place.

Building societies think this is unfair, as it will introduce a competitor without the burdens associated with the credit crunch.

The European commission is investigating the Government's plans for Northern Rock this week.  Attempting to protect its members against a new and unhindered competitor emerging, the Building Societies Association is urging the Commission that the healthy half of Northern Rock should pay financial penalties if the plans go ahead.

One thing's for sure: the government can't leave Northern Rock as it is, and with the banking sector not in the best of health, it'll probably be necessary to seduce bidders with some kind of restructuring.

However: the building societies have a cause worth sympathising with.  They far less to blame for the credit crunch than banks are, and Northern Rock shouldn't get a free pass back into the market.

What do you think - how would you resolve the conflict?

Cheltenham & Gloucester, one of the lenders in the huge Lloyds Banking Group stable, has just shuffled its rates - and brought an end to 'dual pricing' in the process.

The rates update is nothing spectacular in itself - only the 3.99% tracker mortgage looks like a possible best buy - but the noteworthy aspect of this change is that C&G's rates are now the same for both mortgage advisers and direct applicants.

'Dual pricing', the habit of lenders offering special deals to applicants in branch or via the lender's website, is a practice loathed by intermediaries (advisers, IFAs) as it puts them in a no-win situation. They have to offer customers best advice, meaning that with dual pricing they feel the obligation to tell clients to pop down the road themselves, earning no fee in the process.  Advisers could charge an upfront fee for this kind of advice, but they fear this will turn customers away.

It's probably good that C&G have taken this step, as it helps clear up a confusing marketplace for applicants, although we're not sure all banks will do the same.  Perhaps some lenders will stay friendly to intermediaries, while others (like, say, HSBC) will aggressively court direct business.

By all means let us know whether you think dual pricing favours the banks or the applicants... though we're sure not many of you will say it favours advisers!

Bradford & Bingley has admitted huge losses caused by bad debts.

Its savings and deposits business has been sold and now sits under the Santander umbrella, leaving the nationalised B&B with only its mortgage and loan book.  And what a bad one it is...

Out of £40.3bn out on loan, the bad debt total now stands at £328.4m. That means it has quadrupled in a year.  The culprit? Mortgage arrears.

This is probably a symptom of B&B's over-keen lending during the boom, combined with its none-too-smart acquisition of a tranche of adverse credit mortgages from Kensington and GMAC just in time for the credit crunch.

We also wonder whether there could be a touch of carelessness from lenders still stuck with B&B, hoping to break free one way or another and allowing their loans to fall into arrears.  I'm not sure I'd want my credit rating affected by doing that, but then if you have poor credit in the first place, where's the loss?  Just a thought...

...and who could blame them?

Paragon Mortgages has just released figures showing that nearly 7 in 10 mortgages submitted through mortgage advisers in April, May and June this year were for fixed-rate deals.

This is the biggest proportion of fixed rate mortgages since Paragon started surveying the market in 1996. The most popular fixed-rate mortgage term was 2 years. Meanwhile, tracker mortgages fell to only 26% of applications.

We're not surprised, as trackers don't look so appealing when the rate can only really go up from here. Get stuck on a tracker now, paying 2-3% over base, and you could be a bit bothered were rates to take a jump upwards.

However, Paragon MD John Heron says it might not be just because of that sort of common sense.  When the base rate was on its way down, lenders pulled their trackers to stop everyone jumping on the bandwagon, so applicants were funnelled towards the fixes. (When trackers re-emerged, of course they had a lot more margin built in).

Fixed-rate mortgages are still looking low if you've got enough deposit, and August is a good time to get accepted while the 'queue' is shorter than usual.