Keen Eye for Manufactured Housing
By Mickey Storms

Though the loss rates exhibited by manufactured housing (MH) loans may have peaked during 2003, the fallout continues to generate unpleasant surprises. Radian Insurance Inc. recently announced it was taking a $96 million dollar charge to increase loss reserves on a Conseco MH MBS transaction that the company insured to $111 million. The deal is believed to be Conseco 2000-3.

At inception, Radian's loss position was senior to an estimated first loss position of $145.0 million, or 14.7% of $980 million dollar original balance. Recent loss rates for the Conseco 2000-3 on an annualized basis have ranged from a high near 14% to a low near 9%. Cumulative losses are approximately 9.5%. Analyst estimates for total lifetime losses for 2000 vintage deals such as the Conseco 2000-3 range from mid 20% to 35%. The credit performance of AAA MH MBS from 2000 vintage deals remains in the spotlight as a result.