This is a vast shift from the benign environment which prevailed for the 12 years until 2007, and so there are many executives with only limited experience of capital rationing during a recession.

Such is the intensity of these pressures, that many of the current stresses are likely to persist for much of the next decade…

Please select the link below to download the full press release:

Management Issues, Planning and Quantitative Modelling for UK Mortgage Providers

The analysis concentrates on establishing the distribution of mortgage loans at 70% of the current value of the property and above because these are the loans that are most likely to generate losses for both lenders and borrowers upon repossession and sale of the property. The study focuses upon outstanding mortgages at 1st January 2009, for which there is comprehensive data. As the movement in house prices between 1st January and 30th June 2009 has been virtually static, the LTV distribution at 30th June is likely to be essentially the same as at the beginning of the year.

Other recent studies of the current LTV distribution have focussed mainly upon negative equity for first charge, regulated mortgages. This study has been extended to cover the LTV distribution for the whole market and thereby illustrates the difference between the regulated and unregulated market sectors.

The base data for this study has been taken from the FSA, Bank of England and CML…

Please select the link below to download the full press release:

UK Loan to Value Distribution Analysis of Unregulated Loans

This is the expected cost of repossessions that will emerge over the next ten years. It represents 69.2% of the estimated Pillar 1 capital base and 2.53% of total outstanding mortgage loans.

Although house prices have stabilised recently, 47% of all mortgage loans are potentially “at risk” from loss on repossession because the outstanding loan is currently more than 70% of the current value of the property. This figure includes second mortgages and other secured borrowing, but excludes other forms of unsecured debt that mortgagees may be exposed to…

Please select the link below to download the full press release:

Calnea Analytics – The UK Mortgage Market – Outlook and Commentary 2nd Quarter 2009

For more information – please visit our CMVS page here or contact us on the form below. 

Selwyn Lim, Managing Director of Calnea said “It is rare to find people of the calibre of Troy and Andrew, so we are very pleased that they have chosen to work with Calnea. The CMVS product, which they join us to launch, offers a real strategic advantage to our clients to evaluate and quantify their mortgage risk, and to use this knowledge to survive the current turmoil, and thrive as their peers struggle. Andrew and Troy’s experience in identifying and quantifying risk alongside Calnea’s modelling and automated valuation expertise ensure that this product offers mortgage lenders and holders of loan books unparalleled risk evaluation and strategic insight.”

Andrew Campbell-Hart is a Director of Calnea Analytics and a specialist in credit disciplines, regulation and financial risk modelling. He is a qualified  accountant and chartered financial analyst  with a degree from Oxford in Econometrics and Engineering Science. In a wide ranging career, he has worked with PriceWaterhouse, Commercial Union, Royal Insurance Group, Sedgwick Group, Standard & Poor’s and the FSA. His current areas of interest include insurance and reinsurance, property related banking, and defined benefit pension schemes

Troy Martin is a Director of Calnea Analytics and an authority on financial risk assessment and insurance. He ran the Royal and then Royal and Sun Alliance Mortgage Indemnity businesses in the 1990s subsequently working with New Zealand entrepreneur and actuary Ian Main developing global mortgage financing and risk management solutions; and with Dr Stephen Satchell of Trinity College, Cambridge developing economic scenario testing techniques for mortgage portfolios. He served as CEO of the Medical Insurance Agency in 2002-2003. In 2004 he authored “Understanding Downturn Default”, a definitive study of mortgage risk and loss during the 1990s. He has a first degree from Exeter University, is a Chartered Insurer and Fellow of the Chartered Insurance Institute.

Calnea Analytics is pleased to announce the launch of its Repossession AVM.

Building upon their existing AVM know-how, Calnea’s new product delivers to users estimates of property sale value achieved under conditions of forced sale or in circumstances of repossession.

Building upon the statistical expertise that led Calnea to become HM Land Registry’s preferred statistical consultants; the Calnea Repossession AVM represents a valuable addition to the company’s range of AVM and consulting services offered to the lending industry.

Utilising a combination of exclusive and publicly available data sources, the Calnea Repossessions AVM is a product of granular analysis of the impact of property type, geography and market liquidity factors on the supply and demand levels normally experienced when a property is sold following repossession. Having found very large variations in discounted values across market segments and within small geographic areas, Calnea believes there is a strong need for a product that can deliver more accurate assessment of Loss Given Default.

Jonathan Upton, Business Development Director of Calnea Analytics said “The Repossessions AVM has been produced following consultation with lenders, and has grown out of a statistical review of a substantial body of repossessions data. Coupled with our AVM, we are able to provide unique discount factors for properties based upon the most granular analysis possible of this, thankfully small, market segment. Lenders can use this input as part of general reviews of loan book risk and to assist with their Loss Given Default calculations, which forms a key part of their capital adequacy calculations.”

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