Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Related Issuers
Alba 2005-1 plc
Alba 2006-1 plc
Alba 2006-2 plc
Alba 2007-1 plc
Albion No.2 PLC
Albion No.3 PLC
Arkle Master Issuer plc - Series 2010-1
Arran Residential Mortgages Funding 2011-2 Plc
Bluestone Securities plc - Series 2007-1
BOWBELL NO. 1 PLC
BRASS NO.1 PLC
BRASS NO.2 PLC
BRASS NO.3 PLC
BRASS NO.4 PLC
Charles Street Conduit Asset Backed Securitisation 1 Limited
Chestnut Financing PLC
Clavis Securities plc: Series 2006-01
Clavis Securities plc: Series 2007-01
Darrowby No. 3 Plc
Darrowby No. 4 plc
Darrowby No.1 Plc
Darrowby No.2 Plc
Dukinfield PLC
Duncan Funding 2015-1 plc
DUNCAN FUNDING 2016-1 PLC
EMF-UK 2008-1 PLC
Eurohome UK Mortgages 2007-2 PLC
Eurosail 2006-1 PLC
Eurosail 2006-2BL PLC
Eurosail 2006-3NC PLC
Eurosail 2006-4NP PLC
Eurosail-UK 2007-1NC PLC
Eurosail-UK 2007-2NP PLC
Eurosail-UK 2007-3BL PLC
Eurosail-UK 2007-4BL PLC
Eurosail-UK 2007-5NP PLC
Eurosail-UK 2007-6NC PLC
Finsbury Square 2016-1
Fosse Master Issuer plc Series 2015-1
Friary No. 2 plc
Friary No. 3 plc
Friary No.1 Plc
Gemgarto 2015-1 Plc
Gemgarto 2015-2 Plc
Gosforth Funding 2011-1 plc
Gosforth Funding 2012-1 plc
Gosforth Funding 2012-2 plc
Gosforth Funding 2014-1 plc
Gosforth Funding 2015-1 plc
Gosforth Funding 2016-1 plc
Gosforth Funding 2016-2 plc
Gracechurch Mortgage Financing PLC 2012-1
Great Hall Mortgages No. 1 Plc Series 2006-01
Great Hall Mortgages No. 1 Plc Series 2007-01
Great Hall Mortgages No. 1 Plc Series 2007-02
Holmes Master Issuer Series 2016-1
Kenrick No. 2 PLC
Kenrick No.1 PLC
Kensington Mortgage Securities plc Series 2007-1
Lanark Master Issuer plc Series 2015-1
LANGTON SECURITIES (2010-2) PLC- Issue 2011-2
Leek Finance Number Eighteen PLC
Leek Finance Number Nineteen PLC
Leek Finance Number Seventeen PLC
Leofric No.1 PLC
Mansard Mortgages 2006-1 PLC
Mansard Mortgages 2007-1 PLC
Marble Arch Residential Securitisation No. 3 Limited
Marble Arch Residential Securitisation No. 4 plc
Money Partners Securities 2 Plc (MPS 2)
Money Partners Securities 3 Plc (MPS 3)
Money Partners Securities 4 Plc (MPS 4)
Mortgages No 6 plc
Mortgages No 7 plc
Neptune T&C Warehouse Limited
Newgate Funding PLC: Series 2006-1
Newgate Funding PLC: Series 2006-2
Newgate Funding PLC: Series 2006-3
Newgate Funding PLC: Series 2007-1
Newgate Funding PLC: Series 2007-2
Newgate Funding PLC: Series 2007-3
Oak No.1 plc
Oncilla Mortgage Funding 2016-1 plc
OPTIMUM ONE S.A R.L.
Permanent Master Issuer PLC Series 2015-1
Preferred Residential Securities 05-1 PLC
Preferred Residential Securities 05-2 PLC
Preferred Residential Securities 06-1 PLC
Preferred Residential Securities 7 PLC
Preferred Residential Securities 8 PLC
Residential Mortgage Securities 19 Plc (RMS 19)
Residential Mortgage Securities 20 Plc (RMS 20)
Residential Mortgage Securities 21 Plc (RMS 21)
Residential Mortgage Securities 22 Plc (RMS 22)
Residential Mortgage Securities 28 Plc
ResLoC UK 2007-1 PLC
RMAC 2003-NS1 PLC
RMAC 2003-NS2 PLC
RMAC 2003-NS3 PLC
RMAC 2003-NS4 PLC
RMAC 2004-NS1 PLC
RMAC 2004-NS3 PLC
RMAC 2004-NSP2 PLC
RMAC 2004-NSP4 PLC
RMAC 2005-NS1 PLC
RMAC 2005-NS3 PLC
RMAC 2005-NS4 PLC
RMAC 2005-NSP2 PLC
RMAC SECURITIES No. 1 PLC Series 2006-NS1
RMAC SECURITIES No. 1 PLC Series 2006-NS2
RMAC SECURITIES No. 1 PLC Series 2006-NS3
RMAC SECURITIES No. 1 PLC Series 2006-NS4
RMAC SECURITIES No. 1 PLC Series 2007-NS1
Silk Road Finance Number Three PLC
Silverstone Master Issuer PLC Series 2016-1
Slate No. 2 PLC (Public)
Slate No.1 PLC (Public)
Southern Pacific Financing 05-B plc
Southern Pacific Financing 06-A plc
Southern Pacific Securities 04-1 plc
Southern Pacific Securities 04-2 plc
Southern Pacific Securities 05-1 plc
Southern Pacific Securities 05-2 plc
Southern Pacific Securities 05-3 plc
Southern Pacific Securities 06-1 plc
Tombac No.1 PLC
Tombac No.2 PLC
Towd Point Mortgage Funding 2016-Granite 1 PLC
Trinity Financing Plc
Trinity Square 2015-1 plc
TRINITY SQUARE 2016-1 PLC
Uropa Securities plc Series 2007-01B
Warwick Finance Residential Mortgages Number One PLC
Warwick Finance Residential Mortgages Number Two plc
Announcement:

Moody's: Potential for Negative Equity Highest in Northern England Among 2006-2008 Vintage Interest-Only Mortgages

14 Jul 2016

London, 14 July 2016 -- In a hypothetical scenario of a 20% decline in UK house prices, 9% of UK mortgage borrowers would fall into negative equity, says Moody's Investors Service.

Moody's analysis reveals the persistent disparity in the UK market, as northern borrowers are most vulnerable to price fluctuations; while pre-crisis, interest-only mortgages are most exposed by loan vintage and loan type.

"Post-crisis price gains have not been even across the country, placing borrowers in northern England, Wales and Scotland at greater risk of negative equity if house prices were to decline," says Steven Becker, an Analyst at Moody's.

Borrowers in northern England have built up the least equity in their homes and are therefore most likely to go into negative equity if house prices were to fall again, which would be credit negative for residential mortgage-backed securities (RMBS) with exposure in those regions. Moody's says a 20% decline in prices would put up to 22% of northern borrowers into negative equity. In contrast, less than 1% of southern borrowers would enter negative equity if house prices fell by 20%. A 10% decline in prices would put up to 9% of northern borrowers - and a negligible 0.03% of southern borrowers - in negative equity.

Certain loan types and vintages are more sensitive to price movements than others. Moody's says borrowers with interest-only mortgages and those that obtained a mortgages between 2006-2008 are most likely to lose the equity they gained since 2009, if house prices fall. Interest-only loans account for just over 1/3 of outstanding owner-occupied UK mortgages. Borrowers with interest-only loans originated in 2006-2008 are most susceptible to negative equity in this instance.

"Interest-only loans, which were most prevalent in the run-up to the financial crisis, are more likely to fall into negative equity because their principal balance stays constant while prices move. When a borrower owes more than a property is worth, the likelihood of default increases," says Becker.

Moody's report, entitled "RMBS -- UK: Potential for Negative Equity Highest in Northern England Among 2006-2008 Vintage Interest-Only Mortgages", is available on www.moodys.com. The rating agency's report does not constitute a rating action.

Moody's considers that pre-crisis and more recent vintages may be riskier in severe house price decline scenarios. Property values have doubled on average for borrowers who obtained mortgages at the housing market's low-point prior to 2003. In comparison, borrowers who took out a mortgage pre-crisis in 2006-2008 have seen the value of their properties increase by 15%, on average. Comparatively, borrowers who took out loans in 2003-2006 and in 2009-2013 have seen their home values increase by about 30% on average. In a 20% house price decline scenario, 13% of loans originated in 2006-2008, and 10% of loans originated 2014-2015, would go into negative equity, compared with just 3% of borrowers who took out a mortgage prior to 2006 or in 2009-2013.

Only a few UK borrowers within Moody's-rated UK RMBS pools have negative equity after years of house price gains. That said, borrowers in northern England, Wales and Scotland (which combined make up 34% of UK RMBS collateral) have not recovered as strongly. These regions are particularly sensitive to house price declines. Meanwhile, borrowers in southern England, which represent 49% of RMBS collateral, saw their homes significantly appreciate in value following the financial crisis and are less likely to have negative equity if house prices decline. Moody's study excludes non-owner occupied loans and loans backed by properties based in Northern Ireland owing to the low number of securitised loans in that region. Interest-only loans and mortgages originated in 2006-2008 account for respectively about 38% and 49% of the outstanding collateral in RMBS Moody's rates.

Subscribers can access the report at: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF435679

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: London +44-20-7772-5456, New York +1-212-553-0376, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Steven Becker
Analyst
Structured Finance Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Olga Gekht
VP - Sr Credit Officer/Manager
Structured Finance Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Moody's: Potential for Negative Equity Highest in Northern England Among 2006-2008 Vintage Interest-Only Mortgages
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Moodys.com