Money Partners RMBS 34% in arrears
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Moody’s has downgraded three tranches of non-confirming residential mortgage-backed securities issued by Money Partners which are currently 34.3% in arrears of 90 days or more.
As of February 2011, Money Partners Securities 2 cumulative losses as a percentage of the original portfolio balance amount to 4.1%, up from 1.5% in May 2008.
Loans delinquent by more than 90 days, including outstanding repossessions as a percentage of the current portfolio balance, amount to 34.3% - an increase from 17.9% in May 2008.
Approximately 12.7% of the MPS 2 current portfolio balance is represented by loans in arrears by more than 360 days.
The Goldman Sachs-owned lender suspended new lending in February 2009.
Moody’s says since May 2008, constant prepayment rates have decreased from 19.9% to 7.2% while weighted average loss severity has increased from 24.9% to 34.6%.
Moody’s has increased its lifetime expected loss assumption for the MPS 2 portfolio from 4.4% to 7.2% of the original portfolio balance.
The ratings agency has also downgraded nine classes of notes issued by Kensington Mortgage Securities plc Series 2007-1.
As of March 2011, KMS 2007-1 cumulative losses as a percentage of the original portfolio balance amount to 3.8%, up from 0.8% as of September 2008.
Loans delinquent by more than 90 days, including outstanding repossessions as a percentage of the current portfolio balance, amount to 29.0% - an increase from 13.1% as of September 2008.
In March Mortgage Strategy reported that overall, 23% of Kensington Mortgages’ portfolio was 180 days or more in arrears in 2010.
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Readers' comments (6)
Gobsmacked | 3 Jun 2011 5:55 pm
I am a little new to these things, but I thought a dodgy arrears rate was something around 5%. Are these figures astounding or am I overreacting? Someone help me here. If this is as bad is it looks what was going on?
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Ancient Wisdom...is a mortgage broker in N3 | 6 Jun 2011 2:17 pm
...guess what folks, when rates rise, more lenders will report 90days arrears on mortgages increasing.
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Trevor Cherry | 6 Jun 2011 4:11 pm
This was primarily sub prime mortgaes Gobsmacked, so whilst it wa always going to be significantly higher than standard residential mortgages, these figures are very very grim. Particularly whenyou consider that usually these loans arent even considered to be in arrears at all until they are 3 months plus down. Imagine if you will what the figures would be if those of 2 months + were reported....
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Luke Atkinson | 7 Jun 2011 1:26 pm
This is the worrying factor of the housing market today. Ancient Wisdom is right, wait to see what happens when interest rates rise.
Those who are with sub prime lenders who are no longer operating in the market, nor offering new rates to those on SVRs, will be trapped.
How many lenders in today's market will accept a remortgage applicant with 3 or more months arrears?
Repo's will rise, house prices will fall.
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Anonymous | 8 Jun 2011 10:32 am
Excellent news. People will, hopefully, stop believing it's their divine right to own a home despite showing zero financial responsibility.
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Subtastic | 8 Jun 2011 4:14 pm
I was only talking about this the other day Luke.
Talk about a country sitting on a time bomb.........we're sitting on a Trident Thermonuclear Device!
If interest rates even twitch I'd say 90% of those with Sub-prime lenders will wobble and fall.
Couple that with the fact that sub primes are also reticent to repossess in case the regulator snips their bits off.
Never mind cases that are 2 and 3 plus.........what you need to be worried about are those that are 10 and 20+ payments down and still bobbing along.
Thats the true next time bomb.
you might as well bankrupt the lot of them and write off the losses.......words like catastrophic will be wholly inadequate.
anonymous I get your sentiment and you are right........problem is some of the good guys are being taken down with them for just being in the wrong industry at the wrong time.
Sad times.
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