08.31.2008

In July 2008 we saw a modest increase in new mortgage issuance compared to June 2008. RuMAC Mortgage Index grew from 100 to 106. Index participants demonstrated inconsistent performance: some bank improved their issuance by over 20% when other banks showed significant decrease. Banks are seemingly following their own strategies bounded by their liquidity capacity and market predictions.

RuMAC Prepayment Indices slowed to 9.8 and 2.87 for RuMAC Prepayment and Refi Indices accordingly. Prepayment speed is about half of the last year's July number.

07.29.2008

Mortgage market is in the quiet state. RuMAC Mortgage Index grew only 4 points in June from May 2008. All banks are demonstrating similar dynamics. Compared June 2007, banks issued similar volume of new credits in June 2007.

RuMAC Prepayment Indices were not as fast a year ago, however also grew compared to previous month. Major reason in our opinion was inflation. Taking inflation into consideration borrowers have lower incentive to prepay mortgages taken years later. Obviously, price inflation also makes consumption to grow as percentage of household income leaving lesser free funds.

06.27.2008

In May 2008 RuMAC indices celebrated their first anniversary. Now there is an opportunity for month-to-month comparison. Due to continuing problems with liquidity new mortgage volume declined by 4% in May 2008 compared to May 2007, RuMAC Mortgage Index showed 96 points. Comparing to April 2008 the decline was almost 20% but partially due to the number of holidays in May. All banks demonstrated similar dynamics notwithstanding their size or other characteristics.

RuMAC Prepayment Index and Refi Index were 10.81 and 2.74 respectively. These rates are very close to April 2008 and May 2008 values.

06.26.2008

Sergei Kaduk presented his report "Development of the Mortgage Market in Russia" at the conference "Retail banking services in Russia". Slides of his report are available in Presentations.

06.10.2008

This year is indeed a special, jubilee year for RuMAC CEO Prof. V. Ponomarev. In 2008 we celebrate:

• 40th anniversary of his graduation from the Physics faculty of Moscow State University and beginning of his scientific career

• 75th anniversary of the School of Physics for Natural Faculties of Moscow State Pedagogical University which Prof. Ponomarev headed in 1982-1989

• 25th anniversary of scientific school "Gauge theory of gravitational interaction in post-Ryman spaces" established by Prof. Ponomarev

• 20th anniversary of the Institute for Safety of Nuclear Energy Development. Prof. Ponomarev was a key contributor in its organizing and development.

RuMAC whole-heartedly congratulates Prof. Ponomarev on significant dates in his scientific career.

05.29.2008

RuMAC Mortgage Index for April 2008 remained close to the March level. Our forecast for growth did not come to fruition. Main reason for it was continuing difficulty with refinancing of mortgage loans. Looking deeper into differences among banks we can note an interesting tendency. Banks that we were previously very aggressive originators have slowed their operations in April by raising interest rates and adding extra requirements on borrowers. Their issuance rates declined compared to March. At the same time, banks which tried to achieve consistent growth without lowering their credit standards demonstrated continued growth in origination in April. We view this phenomenon as a sign that mortgage market becomes more rational and conservative while more "optimistic" banks are learning their lessons.

RuMAC Prepayment and Refi Indices showed 9.73 and 3.83 respectively - very small values historically. We don't have enough data to give statistically sound commentary of these slow speeds.

04.23.2008

In March, RuMAC Mortgage Index grew 9% compared to February reaching 120. Growth could be seen across all universal consumer banks despite their size. However, monoline mortgage banks lowered their new mortgage issuance which could be seen as continued difficulties with liquidity and financing for mortgages. At the same time, the very recent MBS securitization by KIT Finance gives rise to hopes that mortgage market would grow faster in future months.

RuMAC Prepayment and Refinancing Indices showed 19.14 and 4.78 respectively, which is at the low range of their historic levels.

03.28.2008

RuMAC Mortgage Index showed 110 points in February 2008. It is lower than results for every month of the second half of 2007. Most likely causes for this are continuation of the liquidity crisis and growth of mortgage interest rates. At the same time, on-going improvement of the real estate market which is evidenced by property prices growth allows us to make prediction for much higher RuMAC Mortgage Index in March.

RuMAC Prepayment Indices demonstrated average levels.

02.23.2008

RuMAC published Russian Mortgage Indices for January 2008.

In January RuMAC Mortgage Index showed only 66 points. This is a seasonal January drop caused by long holidays and shifting of the mortgage applications to December. RuMAC Mortgage Index in December was at 147.

RuMAC Prepayment Indices also declined which indicates lack of free funds due to borrower's holiday spending.

02.10.2008

"Securities Markets" magazine, volume #3 2008, published S.Kaduk and A.Kazakov article "American Subprime Mortgage Crisis and Its Influence on the Russian Market."

01.29.2008

RuMAC published Russian Mortgage Indices for December 2007.

In December RuMAC Mortgage Index grew 16.5% compared to November, reaching 147. This sharp increase is caused by the end-of-the-year seasonal factor: borrowers were inclined to close before New Year and Christmas holidays. Looking at various banks we have noticed diversion in their performance: some banks lowered new loan issuance compared to November. Growth was funded by the banks without liquidity problems and those who were able to refinance loans.

December figure for the RuMAC Prepayment Index appeared to be close to the average speed over the period of index calculation. 20-25 CPR is a normal prepayment speed for Russia. Seasonal factor, desire to leave debts in the old year, seemed to be the driving force behind the closeness between RuMAC Prepayment and Refinancing Indices.