View more on these topics

Sub-prime RMBS remain stable

The performance of the UK non-conforming residential mortgage-backed securities market remained stable over the three-month period ending February 2012, according to Moody’s.

In February 2012, the 90+ day delinquency index for UK non-conforming RMBS was 16.3%, below the 21.0% peak reached in June 2009.

Since August  2010, outstanding repossessions have remained around 0.9% of the current  outstanding balance, which is substantially below the peak of 3.6% reached in February 2009.

Cumulative losses increased further, although at a slower pace, reaching 2.2% of the original balance in February 2012.

Weighted-average loss severity as a percentage of properties sold was around 26.6%, although different vintages and series demonstrated substantial volatility.

The average loss severity is currently below its  June 2010 peak of approximately 33.4%.

Whilst performance has stabilised in many UK non-conforming RMBS transactions, Moody’s says its remains concerned by  high delinquency levels.

Furthermore, low redemption rates, which were 6.2% in February 2012, are far below the pre-2009 levels of 20%-40%.

In  Moody’s view, these low redemption rates indicate that the portfolios will remain outstanding for a longer-than-anticipated period of time, exacerbating future performance uncertainty.

The total current outstanding pool balance of all 81 transactions rated by Moody’s in the UK non-conforming RMBS market decreased to £21.3bn in February 2012, a year-over-year decrease of 7.1%.



By Matthew Syed

Marketwatch – April 2012

If anyone needs any cheering up at the moment, then all you have to do is be thankful you are not chancellor George Osborne.

The Mortgage Mole

Virtuous Cycle Paul Merrigan, chief executive of Lifetime Group, is one week into an epic cycle marathon through Europe lasting nearly a month.

In Focus Ebola cover - thumbnail

White paper — In Focus: Ebola Virus Disease

Jelf Employee Benefits focuses on Ebola Virus Disease (EVD) and what this means for businesses with operations in West Africa. This will be of particular interest to those with employees either travelling to, or living within, West Africa, the area affected by the most catastrophic outbreak of Ebola to date.


News and expert analysis straight to your inbox

Sign up