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cashinmattress

Uk Sub-prime Rmbs Arrears More Than Double In 12 Months

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UK sub-prime RMBS arrears more than double in 12 months

Arrears on mortgages in UK sub-prime residential mortgage-backed securities have more than doubled over the last 12 months.

According to Moody’s latest report into sub-prime RMBS, arrears have increased from 8 per cent in Q1 2008 to 18 per cent in Q1 2009.

It also found that one in five borrowers in these portfolios were more than 90 days delinquent in Q1 2009.

Moody's senior associate Georgij Ludmirskij says: "Eleven transactions posted 90+ days delinquencies higher than 30 per cent. All vintages and transaction series deteriorated, and delinquencies increased in all transactions during the quarter.â€

Among the transactions with the greatest arrears are Lehman Brothers’ Eurosail securities, and Rooftop’s Mansard, ranging between 28 per cent and 32 per cent in arrears.

Moody’s also found that Platform’s Alba, Leek and Great Hall Mortgages remained the series with the lowest levels of delinquencies, ranging from 11 per cent to 16 per cent.

The rating agency has downgraded seven securities in Q1 2009, and since December 2007, Moody's has reviewed and adjusted the loss expectations in 55 UK sub-prime transactions. Currently it says the reserve funds in 37 of the 89 outstanding securities are below their target level.

Sound economic fundamentals.

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Are these the same ratings that Moody's previously gave AAA status to?

Perhaps they should have given these securities the turd ratings they surely deserved in the first place.

Hey come on now, the directors at Moody's et al wouldn't want to pass up the offers of yachts, flash cars, high grade cocaine, hot hookers and rent boys, and suitcases full of cash in lieu of being responsible and ethical.

EDIT: Added the drugs and prozzies for accuracy.

Edited by cashinmattress

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Are these the same ratings that Moody's previously gave AAA status to?

Perhaps they should have given these securities the turd ratings they surely deserved in the first place.

Nope -- they were cashing in on the scam themselves....

Biggest case of insider dealing in history....

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Amazing those figures track everything i've seen at the current sub prime lender i work with.

Once it goes up to 20% for us* TSHTF, because we have to buy back the mortgages, it's will get to the point that customers will see 'gifts' against there accounts, to delay the day of reckoning.

Again I can only talk about the company i work for but the accounts passed on for securitisation represent the cream of our loan book.

*I'd love to know if this was standard.

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Hey come on now, the directors at Moody's et al wouldn't want to pass up the offers of yachts, flash cars, high grade cocaine, hot hookers and rent boys, and suitcases full of cash in lieu of being responsible and ethical.

EDIT: Added the drugs and prozzies for accuracy.

And what do they get for saying :

it had changed its assumptions about UK house prices in the past few months. It also stress-tested the mutuals’ commercial loan portfolios, where it expects the performance to worsen during the next few years.

Marjan Riggi of Moody’s said: “What’s different is the loss expectation is higher than it was three or four months ago looking at the economic forecasts on housing.

“Last year we were looking at mortgage lenders and stress-testing a 25 per cent fall in house prices. In the past three or four months that assumption has changed to a 40 per cent fall, which is a considerable difference.â€

On Wednesday Adrian Coles, director-general of the Building Societies Association, said Moody’s had included an extreme stress test of a 60 per cent fall in house prices,

The FSA after stress testing lenders for 50% falls got:

£19.7m in bonuses last month, a 40 per cent increase on last year’s payouts, according to figures obtained by the Liberal Democrats.

A Freedom of Information request revealed that £4m went to executives earning over £100,000 and one employee received a bonus of £90,000.

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Once it goes up to 20% for us* TSHTF, because we have to buy back the mortgages, it's will get to the point that customers will see 'gifts' against there accounts, to delay the day of reckoning.

So when does the day of reckoning come? Wouldn't it be more cost-effective to find out why the loan is not performing and act appropriately?

Isn't a lender giving "gifts" to non-paying lendees commercial suicide?

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So when does the day of reckoning come? Wouldn't it be more cost-effective to find out why the loan is not performing and act appropriately?

Isn't a lender giving "gifts" to non-paying lendees commercial suicide?

I've no idea when the day of reckoning will come, but IMHO it wouldn't surprise me if it was in the next three months, I doubt it would be the end of the company but it wouldn't half be a kick in the balls for em, and restrict new lending severely, as most of the cash for new loans has been taken from securitisation (to be spent over four years).

The only growth area in the company is the huge collections department and accounts in the securitisation pool are targeted ,all the development work i've been doing this last few months is based around getting collecters to the problem accounts as soon as possible..

A few quid here and there on certain accounts can make a lot of difference, or so i'm told these are accounts that haven't quit paying but are behind. I wish i could give more info but i've been kept out of the securitisation projects.

< <edit we know why the loan isn't performing, people aren't paying : ( >>

Edited by slurms mackenzie

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why should this be a concern .. mortgage may go in arraears for few weeks and then mortgage interest payments are made by the taxpayer .. easy ..

Not all loans, certainly not ours.

That said i don't even know if second charges make it into the securitisation pool (i'd guess not) and i don't know how many commerical loans have made it in, plus BTLs

I'll see if i can sniff around a bit more over the coming week.

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So when does the day of reckoning come? Wouldn't it be more cost-effective to find out why the loan is not performing and act appropriately?

Isn't a lender giving "gifts" to non-paying lendees commercial suicide?

The loan isn't performing because it was made to an unemployed bankrupt?

I know some credit card companies try "If you pay £100 we'll credit £1XX to your account". I expect mortgage lenders could try this?

Edited by mikeymadman

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No sub-prime in the UK mate.

Those were the days before the credit markets seized up in mid 2007 when bulls on here and various VI's would

spout in the media that the UK had no sub prime , but it all .... 'started in America'

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Once it goes up to 20% for us* TSHTF, because we have to buy back the mortgages, it's will get to the point that customers will see 'gifts' against there accounts, to delay the day of reckoning.

I don't get that - what's the point of securitisation if there's a clause allowing the assignee to throw the mortgage back at the assignor?

I know companies that buy debt can throw it back if they don't get judgment, but that looks like a different situation to me.

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I don't get that - what's the point of securitisation if there's a clause allowing the assignee to throw the mortgage back at the assignor?

I know companies that buy debt can throw it back if they don't get judgment, but that looks like a different situation to me.

Well the idea on our part was that it wasn't going to go over 20%

The banks on the other side didn't want it going over 20%.

I'm not sure how common these sort of deals are but i can assure the one for the company i work for does have this clause, and some of the big boys were involved in the negotiation.

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Those were the days before the credit markets seized up in mid 2007 when bulls on here and various VI's would

spout in the media that the UK had no sub prime , but it all .... 'started in America'

And what a load of B0LL0CKS that always was.......

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Again I can only talk about the company i work for but the accounts passed on for securitisation represent the cream of our loan book.

that is interesting - had always assumed it would be the total crap that was securitised and that the good stuff would be kept in house

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that is interesting - had always assumed it would be the total crap that was securitised and that the good stuff would be kept in house

For the mainstream lenders i'll bet thats the case, this is sub prime though the company always expects a large number of arrears (the rates and LTV's compensate for this) so when it comes to dealing with the big banks we have to pass on the cream of our book, which of course is like the cream of two week old milk left out in the sahara.

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