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Staff Reporter
The number of home loans in arrears jumped to 1.59 per cent in January, a new report has shown.
According to the latest report by Standard & Poor’s, loans underlying Australian prime residential mortgage-backed securities that are greater-than-30 days in arrears jumped 21 basis points from 1.38 per cent in December 2010.
In addition, subprime RMBS arrears climbed 126 basis points to 11.45 per cent during the same period.
“The proportion of loans that are greater-than-30 days in arrears for January soared to the highest level seen since April 2009. Typically, Christmas spending would be the key contributor to the higher arrears in the months after Christmas. This time, however, it may not be so because we believe households have been prudent,” Standard & Poor’s credit analyst Vera Chaplin said.
“The series of natural disasters that started around end-2010 may have had a greater impact, disrupting some borrowers’ mortgage serviceability. As the full impact unfolds, and with higher mortgage rates and rising living costs, we expect rising arrears in the coming months."
