Northern Rock chief's mistress, the 5 mortgages and the secret £1m property empire

It's not all bad news for the man behind £585m bank crash
By Guy Basnett, 10/08/2008 News World.

THE secret mistress of ex-Northern Rock boss Adam Applegarth bought FIVE homes in THREE years using loans from the bank to build a property empire now worth more than £1 MILLION. Slim brunette Amanda Smithson was granted a succession of mortgages to fund the deals between May 2003 and July 2006—while she was a Rock employee on just £30,000 a year and Mr Applegarth was chief executive. Our revelations of her spectacular rise to wealth come in the week that the troubled bank announced LOSSES of £585 million in the last six months. There is NO suggestion of any financial wrongdoing by 37-year-old Ms Smithson or her powerful married lover. An inside source told the News of the World: “Nobody is suggesting Amanda’s affair with Applegarth had anything to do with it. But many people suffering because of Northern Rock’s woes may be surprised by her portfolio. “She’s now so wealthy she’s well set up for the future and will never have to work again. But she WAS a relatively low-paid executive who was able to gain approval for FIVE mortgages and change her fortunes.” Official Land Registry documents detail just how quickly Ms Smithson amassed her impressive empire, spread across Newcastle-upon-Tyne. Four of the buildings were bought in just a 10-month period. Today we reveal details of her amazing property spending spree: 1. PLUSH apartment, bought for £139,950 in May, 2003, in art deco block The Wills Building, a gated development and one of the city’s most fashionable addresses. 2. UPMARKET mews house, bought for £193,500 in September, 2005, in the same secure compound. 3. RIVERSIDE apartment, bought for £187,000 in December, 2005, on Mariners Wharf, overlooking the city’s fashionable quayside. 4. TRENDY Otterburn Villas flat in posh city suburb Jesmond, costing £155,000 and snapped up just SIX DAYS after property No 3. 5. SWISH £150,500 home in Lavender Garadens, a family neighbourhood of the well-to-do West Jesmond area, bought in July, 2006. Checks on the Land Registry records this week revealed that Smithson was still recorded as the owner of ALL the properties —with all the home loans from Northern Rock still in place and outstanding.
Interestingly just 10 days before she bought property No 3 in Mariners Wharf another flat, just a few doors away in the same block, was purchased in the name of Mr Applegarth’s eldest son Gregory, who had just turned 18.
Documents show it cost £329,000 and was also arranged with a Northern Rock mortgage.
Smithson’s properties are understood to have been purchased as investments for the buy-to-let market, although she is believed to be living in No 2 herself.
Our source said: “By any standards Amanda’s is a high- value property portfolio that’s now easily worth over a million.

Ms Smithson's impressive property empire“She has amassed a small fortune in bricks and mortar very quickly, while most people spend years gradually building up their empire, so they’re not overstretched.” Smithson left Northern Rock in early 2007 after at least five years with the firm, according to a senior company source. She worked in the commercial lending division which covers buy-to-let mortgages. Our source said she had been a management-grade, employee earning around £30,000 a year until the middle of 2006 when she was promoted to a senior manager role, with a rise of up to £9,000.
The source said Smithson is believed to have first met boss Applegarth at a company sales function in 2003 or 2004
It is not known when their affair began. The relationship emerged when anonymous letters were sent to the bank’s board and Applegarth’s devoted wife Patricia in 2006.
Suspicions were first aroused after Smithson began turning up for work wearing expensive jewellery and driving a plush executive car.
Also she mostly booked the same time off work as the boss, who was jetting to the US to holiday at the luxury Four Seasons Hotels in New York and Washington.
A senior source said Applegarth denied the allegations but later privately admitted they were true.
There is NO suggestion he had any influence whatsoever over her property and mortgage deals. But our source said: “It may raise questions because this was when the bank was heading for trouble.
“On one hand, we have a chief executive careering into trouble while having a passionate affair.
“On the other, we have the low-paid employee that he was seeing being granted a series of loans.
“It’s believed she actually owns at least one other home, apart from these five.”
Her financial success is in stark contrast to the bank’s own fortunes.
It ran into crisis last September after management strategy left it overexposed to high-risk deals in America’s sub-prime mortgage market, forcing it to call for emergency help.
It sparked the first run on a British bank in more than 100 years, with queues of worried savers besieging branches all over Britain.
The Government was later forced to nationalise the bank using £17.5 BILLION of tax- payers’ cash.
Despite that, it has now recorded losses and home repossessions have soared by 67 per cent.
Father-of-two Applegarth, who lives with his wife in a £2.5 million home in Matfen, Northumberland, resigned following the crisis.
He took a £760,000 pay-off and £2.2 million pension pot with him.
He is now under investigation, along with the previous management, to determine whether they discharged their duties correctly, or whether their conduct was lacking.

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Jane Atkinson, 10/03/2008