the rating agencies are finally waking up to what i have been saying all along, the housing market is still deteriorating, and losses on the 2005-2008 vintages are going to be higher than a lot of people imagine, note that most jumbos had either 20% or more down, or had second liens, so the first liens were generally well protected, but still Moody's is seeing losses in the 11% range for 2007, and not surprising to me, even higher losses for 2008, no doubt they would already be downgrading 2009 bonds, if there were any.
"An “overhang of impending foreclosures will impact home prices negatively,” with values likely to decline 9 percent more before bottoming in the second half of 2010, Moody’s said"
"Moody’s also said it expects the U.S. government’s effort to curb foreclosures to be less effective than it previously expected because it has “failed to gain traction.” "
"In its last forecast in March, Moody’s predicted cumulative losses, as percentage of original loan balances, of 1.7 percent for 2005 jumbo bonds, 3.6 percent for 2006 securities, 5.1 percent for 2007 securitizations and 6.2 percent for 2008 debt. "
"It now expects losses of 3.8 percent on loans underlying 2005 prime- jumbo bonds, with estimates of 8 percent for 2006 securitizations, 10.9 percent for 2007 debt and 12.3 percent for 2008 securities. "
Unfortunatly, rating agencies do not have a very good track record. Some consider them to have been a factor in causing the current economic problems. If all their ratings and predictions could be trusted to be correct we might never have gotten into this mess in the first place.
What you dont know is how much of that is on PMI. There are a lot of other insurance Companys out there. Thats what everyone seems to forget, MTG is so much larger than PMI as are some others so they are going to take a bigger percentage of the loss. Now thank you for your info, to me it means nothing. Still holding strong.
that's not the point, pmi or the mis have very little exposure to jumbos, the point is mortgages from the 2005-2008 era are deteriorating rapidly, and some people are finally starting to wake up to it, let's hope the regulators and/or fannie/freddie wake up to it sooner rather than later and put some of these companies out of their misery, these companies cannot write their way back to profitability, there is just not enough profitable business out there given the economy and housing market, at least two, even better 3, of these companies needs to be shut down, with pmi, radian, and united guaranty being the logical candidates, although radian is writing a lot of business these days in a lot of ways they are more undercapitalized than pmi, because they are counting on their financial guaranty business to provide them capital, except they are exposed to regional and community banks through their trups exposure, and another 4 failed already today, and 400 probably next year, but whatever the case, there is a limited amount of truly profitable business out there, and it should be shared amongst the mis that have a shot at making it.