Why Australia's Sky is not falling

[Token Funder]

TF, me old dad, I doubt they're more reliable than the RBA. I think you're wrong, and since you can't even provide a link...

Just noticed this bit....you suggesting I'm making it up Shad?

Cheap thinking I get...but cheap shots. Not nice.

As I pointed out, I can't find the document I have (Moody's Q3 2008 Oz RMBS Review) in the public domain and therefore won't post it here as it's a paid service.

Feel free to keep and eye out for it....

 

[Token Funder]

mmm interesting Token Funder,
may i ask what is your job.

I'm the token funder on the forum and run a mortgage business for a financial institution.

Now, obviously, I don't have the extensive experience and inside knowledge of young Shadow, I just do it for a living

Frankly, it's got me stuffed why he's borrowing money from Westpac and not running the show.

 

[Shadow]

*pats Shadow on head*
*pinches Shadow on the cheek*
To your second point my cherub
read above again if confused
young Shadow

Stop baiting and trolling please.

and the RBA obtains the data via APRA from *drum roll* the banks

OK, so you're saying the RBA and banks are simply lying, but Moodys is telling the truth based on a link you can't find. Okay...

For borrowers who are in arrears (read above again if confused) a bank would capitalise those arrears by extending the loan term or increasing the borrowings. That is, rolling the outstanding into the debt and starting the clock again.

So they're not in arrears then, they can handle the refinanced loan and there is no immediate danger of foreclosure.

What was your point again?

Just noticed this bit....you suggesting I'm making it up Shad?

Still no link then?

Cheap thinking I get...but cheap shots. Not nice.

That's rich coming from you considering your baiting and trolling that I quoted above.

As I pointed out, I can't find the document I have

Uhuh... sure.

Now, obviously, I don't have the extensive experience and inside knowledge of young Shadow, I just do it for a living

Frankly, it's got me stuffed why he's borrowing money from Westpac and not running the show.

You sound angry, irritable, and a little bit rattled. Chill out mate!

Cheers,

Shadow.

 

[chilliaa]

I'm the token funder on the forum and run a mortgage business for a financial institution.

Now, obviously, I don't have the extensive experience and inside knowledge of young Shadow, I just do it for a living

Frankly, it's got me stuffed why he's borrowing money from Westpac and not running the show.

sorry may i have more detail.
You 'run' a mortgage business, so do you own a mortgage brokerage service, or do you work or head up a section of a financial institution (no need to give names) and if so does the division specialise in residential mortgages, or is it across the spectrum.

 

[Token Funder]

Stop baiting and trolling please.



OK, so you're saying the RBA and banks are simply lying, but Moodys is telling the truth based on a link you can't find. Okay....

SM

I am not and did not (but you know that). I am simply saying that banks can and do manipulate their data to massage their arrears numbers in ways that cannot be achieved once deals are termed out.

It's a fact. Get over it.

Being internally dishonest it one thing, but you should try and keep it to yourself. I don't have a link, I have an actual document. As I said before and you half indicate in your truncated quote (accidental I am sure), I pay for the service and therefore can't put it up here without breaching my terms of use. That said, I am sure in due course it will end up in the public domain.

You can apologise when you find it.

So they're not in arrears then, they can handle the refinanced loan and there is no immediate danger of foreclosure.

What was your point again?

SM

Once again you resort to arguing with yourelf. Who was talking about foreclosure?. I was simply providing more up to date information than the last lot you provided. Ignore it..it doesn't change the fact that it exists.

Still no link then?

Read the posts Shadow.

It is apparent you are the kid with his fingers in his ears. If you want to restrict your understanding of the world out there to that which conforms with your preferred outcome, feel free to stay the course.

No skin off my nose.

 

[Piston Broke]

"In Q3 2008, average RMBS non-conforming delinquencies greater than 90 days past due reached another new record high of 8.91 per cent in July. "

http://www.mortgagebusiness.com.au/index.php?option=com_content&task=view&id=1420&Itemid=37

 

[Sheryn]

"In Q3 2008, average RMBS non-conforming delinquencies greater than 90 days past due reached another new record high of 8.91 per cent in July. "

http://www.mortgagebusiness.com.au/index.php?option=com_content&task=view&id=1420&Itemid=37

Token Funder = 1
Shadow = KO

Piston Broke = umpire/ referee/ scoreboard

 

[Sheryn]

I have an actual document. As I said before and you half indicate in your truncated quote (accidental I am sure), I pay for the service and therefore can't put it up here without breaching my terms of use. That said, I am sure in due course it will end up in the public domain.

You can apologise when you find it.

Shadow
Over to you Piston Broke has posted a link to the document referred to by Token Funder!

 

[chilliaa]

Australia’s non-conforming delinquency levels are expected to remain high in the near term as sluggish property market conditions persist and non-conforming borrowers face a high level of mortgage stress compared to prime borrowers according to Moody’s Investors Service.

In Q3 2008, average RMBS non-conforming delinquencies greater than 90 days past due reached another new record high of 8.91 per cent in July.

Nonetheless, Moody’s recent rating review “shows that there is no immediate downward rating pressure given the current level of credit enhancement, which would allow most non-conforming RMBS to withstand more stressful losses than initially assumed”.

May someone help me:
1) What is RMBS
2) Is 8.91% the total over the whole population of non-conforming loans, or just 8.91% out of the population that is delinquent
3) Does the survey include all non-conforming loans written in australia, or only from certain institutions?

thanks

 

[Piston Broke]

thnx lol
It's not the full document but a summary news bite I found searching for it.

RMBS = Residential Mortgage Backed Securities

 

[Shadow]

Shadow
Over to you Piston Broke has posted a link to the document referred to by Token Funder!

Hi Sheryn,

No... that document is referring to non-conforming loans. Non-conforming loans represent less than 1% of the total Australian loan market. Refer to RBA chart below - we can expect arrears on non-conforming loans to be high, they are the Australian equivalent of US sub-prime loans.

http://www.rba.gov.au/Speeches/2008/sp_ag_160508.html
Turning to look at the small sub-prime market in Australia, non-conforming housing loans are the closest equivalent to sub-prime loans in the US, being provided to borrowers who do not satisfy the standard lending criteria of mainstream lenders such as those with impaired or incomplete credit histories. The loans are provided by a few specialist non-deposit taking lenders, with Pepper, Bluestone and Liberty Financial accounting for three-quarters of the market. This is in contrast to the US where sub-prime loans were provided by a wide range of financial institutions.

Non-conforming loans in Australia accounted for only about 1 per cent of outstanding loans in 2007, well below the 13 per cent sub-prime share in the US (Graph 12). The share of new loans in Australia that are non-conforming has also been very low over recent years, at about 1 to 2 per cent, significantly below the 20 per cent sub-prime share that such loans reached in the US in 2006 (Graph 13).

Cheers,

Shadow.

 

[Token Funder]

Hi Sheryn,

No... that document is referring to non-conforming loans. Non-conforming loans represent less than 1% of the total Australian loan market. Refer to RBA chart below - we can expect arrears on non-conforming loans to be high, they are the Australian equivalent of US sub-prime loans.



Cheers,

Shadow.

OK Shad, you're getting there.

I assume you accept that an organisation called Moody's does in fact issue quarterly reports on Australian RMBS.

You have correctly noted that the publication referred to above is their review of non-conforming RMBS as at Q3 '08

Do you still contend I am "making up" my references to a quarterly report produced by an organisation called Moody's for Q3 '08 that provides delinquency data for fully verified and lo doc RMBS?

I look forward to hearing from you

 

[Token Funder]

”.

May someone help me:
1) What is RMBS
2) Is 8.91% the total over the whole population of non-conforming loans, or just 8.91% out of the population that is delinquent
3) Does the survey include all non-conforming loans written in australia, or only from certain institutions?

thanks

1) residential mortgage backed securites. at a really high level it is essentially the end result of selling a package of loans to another party thereby freeing up capital. it's more complex than that, but it's the basic idea
2) % of the population of all rmbs loans that are > 90 days in arrears/overlimit.
3) pretty well all of the (ex) funders in the non-conforming space used securisation so it would be most of the loans, other than those written in more recent times that would have proved difficult to find a buyer for.

It's worth noting that loans termed out (used for rmbs) are the "better" loans as you can't stick into the pool stuff that is already in arrears, not yet seasoned or would otherwise unacceptable to the end buyer/bond holder. Arguably, termed out loans would be performing better than comparable loans originated at the same time in the same place and under the same terms.

 

[Shadow]

OK Shad, you're getting there.

I assume you accept that an organisation called Moody's does in fact issue quarterly reports on Australian RMBS.

You have correctly noted that the publication referred to above is their review of non-conforming RMBS as at Q3 '08

Do you still contend I am "making up" my references to a quarterly report produced by an organisation called Moody's for Q3 '08 that provides delinquency data for fully verified and lo doc RMBS?

I look forward to hearing from you

Tokie, I didn't say I thought you were 'making up' anything... that's just another red herring you've thrown in to disrupt the discussion, derail the thread, and start an unnecessary argument.

I said I thought you were wrong, because your claim does not match the RBA data. I expect the RBA data to be more reliable than Moody's. Therefore I think the data you provided may be wrong. Simple as that.

Subsequently Keith also posted some data from Commonwealth Bank that also suggests you are wrong.

If you do have the Moody's data, and you believe it is more accurate than the RBA data, then please post a link (or screencapture it) and explain why you think it is more reliable than the RBA data. Easy.

You could also cover off on the reasons why the same Moody's that handed out triple-A ratings to dodgy toxic CDOs, has suddenly become more trustworthy than our own Reserve Bank.

But for now, lets just accept the RBA and CBA data that Keith and I have provided.

We have provided data. You have provided nothing but an anecdote.

Cheers,

Shadow.

 

[Token Funder]

Tokie, I didn't say I thought you were 'making up' anything...

Say, perhaps not... infer...well I'll leave that for others to judge:

OK, so you're saying the RBA and banks are simply lying, but Moodys is telling the truth based on a link you can't find. Okay...

I think you're wrong, and since you can't even provide a link...

And by the way, what is it about Terms of Use that you don't understand?

If you do have the Moody's data, and you believe it is more accurate than the RBA data, then please post a link (or screencapture it) and explain why you think it is more reliable than the RBA data. Easy.

 

[Token Funder]

Don't know if I'd trust them...they haven't posted the original document

http://www.mortgagebusiness.com.au/index.php?option=com_content&task=view&id=1478&Itemid=37

Delinquencies tipped to fall
Friday, 12 December 2008

Prime RMBS delinquencies remained high but steady in the third quarter of 2008, Moody’s Q3 Performance Review revealed yesterday.

According to the review, prime RMBS delinquencies remain at their record high of 1.47 per cent while low doc portfolios saw a sharp increase to 3.90 per cent.

While lower interest rates should reduce pressure on arrears, Moody’s cautioned that rising unemployment was a concern.

“The upward trend in arrears is expected to slow due to recent reductions in interest rates although the situation will be tempered by an expected increase in unemployment,” Moody’s senior analyst Arthur Karabatsos said.

“Accordingly if we look ahead, unemployment will become the single most important factor behind credit quality.”

 

[chilliaa]

http://www.mortgagebusiness.com.au/index.php?option=com_content&task=view&id=1478&Itemid=37

Delinquencies tipped to fall
Friday, 12 December 2008

Prime RMBS delinquencies remained high but steady in the third quarter of 2008, Moody’s Q3 Performance Review revealed yesterday.

According to the review, prime RMBS delinquencies remain at their record high of 1.47 per cent while low doc portfolios saw a sharp increase to 3.90 per cent.

While lower interest rates should reduce pressure on arrears, Moody’s cautioned that rising unemployment was a concern.

“The upward trend in arrears is expected to slow due to recent reductions in interest rates although the situation will be tempered by an expected increase in unemployment,” Moody’s senior analyst Arthur Karabatsos said.

“Accordingly if we look ahead, unemployment will become the single most important factor behind credit quality.”

Token Funder, i cant remember the source, but very recent data from somewhere (cant be more helpful on the source but it was reputable) is now showing a trend downwards again (its data is post Sept 08) so it was compiled after the 3rd qtr report you are quoting. However also mentions that the trend may not continue downwards if unemployment increases materially.

 

[Token Funder]

Token Funder, i cant remember the source, but very recent data from somewhere (cant be more helpful on the source but it was reputable) is now showing a trend downwards again (its data is post Sept 08) so it was compiled after the 3rd qtr report you are quoting. However also mentions that the trend may not continue downwards if unemployment increases materially.

RBA data, most likely, but as I have mentioned before, it is bank data which can be made to look better if you put in enough effort and all the banks do.

You'd be surprised at how flexible Certain Banks are in offering deals to square up arrears in the 60 days leading up to their reporting cycle.

It used to happen with market share figures (you could set your watch by St George )

All that said, I expect an improvement (in seasonally adjusted terms)for the half year as a fair bit of Kevs/our money hits mortgage repayments.