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Staff Reporter
Arrears on loans underlying Australian prime residential mortgage-backed securities fell to its lowest level in 2010, reaching 1.35 per cent in November 2010.
According to a new report by Standard & Poor’s, arrears on lo-doc loans that underlie prime RMBS also experienced a decline in November.
Subprime RMBS arrears declined by 72 basis points to 11.93 per cent in November 2010, compared with the level in October – taking the total subprime RMBS outstanding in November to below $2.2 billion.
But while arrears reached a new low in 2010, Standard & poor’s credit analyst Vera Chaplin said she expects to see delinquencies rise in 2011 due to higher interest rates and the impact from Christmas spending.
“Further, the recent natural disasters in Australia may worsen some borrowers' financial positions,” she said.
