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To: Real Man who wrote (356247)	2/4/2008 12:19:39 AM
From: Box-By-The-Riviera™	Read Replies (3) \| Respond to of 436258

this thread is dead. over.

To: Real Man who wrote (356247)	2/4/2008 6:56:31 AM
From: MythMan	Read Replies (3) \| Respond to of 436258

thats not a real country and they still no cahones here where it counts.

To: Real Man who wrote (356247)	2/4/2008 9:58:55 AM
From: ldo79	Respond to of 436258

love the headline................ The Sydney Morning Herald Credit ratings blow for home loans Danny John and Jacob Saulwick February 5, 2008 The hard-pressed home lending market faces not just another interest rate rise but also another bout of higher funding costs after a warning yesterday that the credit ratings on a significant chunk of the Australian mortgage-backed bond market could be cut. The decision by the credit agency Moody's to review the investment ratings on up to $83 billion in loans insured by two US insurers could put increased financial pressure on lenders who have previously tapped the Residential Mortgage Back Securities (RMBS) market to raise cheaper credit. It is yet a further sign of how much the subprime home loans crisis in the US has eroded confidence in global credit markets and spilled over into sources of Australian mortgage funding. The ratings alert particularly affects the US-based insurer PMI, which, along with its rival Genworth, is a major player in the local bond insurance market. PMI recently reported a $US87 million third-quarter loss after making increased payouts to US home loan lenders facing mounting bad debts as a result of the North American credit crunch. Its Australian arm provides cover for bonds that make up about 45 per cent of the local $180 billion RMBS market - much of which has the highest investment rating that is issued by Moody's. The chief executive of PMI Australia, Ian Graham, said last night that the potential downgrade only affected a small proportion of the loans in question. There was no reason to doubt the financial strength of the insurer. "I can be quite categoric about that," Mr Graham said. The bonds involved are mortgage-backed securities which are made up of parcels of residential loans. Banks and other lenders bundle these together and raise money by selling the securities to other investors. High investment ratings reflect the long-term security of such assets and make them more attractive to buy. However, any downgrade in the rating forces up the costs involved, which tend to be passed down the chain - as has happened in recent months with increased mortgage repayments. These financial woes have added to the constraints faced by lenders after the global credit crunch in August saw borrowing costs soar, forcing RMBS markets around the world to shut down. A CommSec analyst, Carlos Castillo, said most Australian banks relied on external insurers such a PMI to provide insurance for their loans, rather than do it in-house. Mr Castillo said the impact would be felt more on the small regional and non-bank lenders than the major banks, which have large deposit bases and the ability to access other forms of debt. "It's going to make funding more expensive for them when they are writing their loans, and also impact on their margins," he said. A banking analyst at ABN Amro, Jarrod Martin, said the Moody's downgrade made life more difficult for lenders dependent on issuing such securities. "This potential downgrade is not conducive at all to a re-opening of the securitisation market," he said. The local market's problems have contributed to the crippling of the mortgage provider RAMS, much of whose business has been sold to Westpac in order for it to find a way out of its financial difficulties. Other lenders have been forced to raise their home loan rates to try to cover their higher borrowing costs and not even the major banks have been immune from the effects. Last month, they raised their standard variable mortgage rates by as much as 0.2 per cent above the official cash rates and now face a further quarter of one percentage point increase if the Reserve Bank moves again today. tinyurl.com