Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Residential loan performance slides: Moody's

Staff Reporter 1 minute read

Spiralling average loan sizes and LVRs over the last three years could spell trouble for lenders, Moody’s reported yesterday.

Moody’s Investor Services Trends in Australian RMBS Collateral: 2004-2007 report identified some deterioration in the performance of Australian residential loans.

It highlighted NSW and specifically South-western Sydney as the main contributors.

“There has been a gradual shift to higher LVRs with the 2007 origination vintage including a significant percentage of loans with an LVR above 95 per cent,” Moody’s assistant vice president and report author Ilya Serov said.

Mr Serov said the increase in higher LVRs was a concern because of the high correlation between delinquency and LVRs.

Advertisement
Advertisement

Moody’s however did believe that the risk to the industry will be mitigated by lower loan volumes from the non-bank sector.

“In the wake of the global credit crisis, lenders, especially in the non-bank space are finding it difficult to access funding…  As a result, we see some of the trends towards higher LVRs and looser underwriting reversing in the short-term as origination is cut back,” said Mr Serov.

Published: 18-06-08

Residential loan performance slides: Moody's
default
TheAdviser logo
default
more from the adviser
expenses Major bank overhauls assessment process

A big four bank has bolstered its assessment team and will priori...

drop rate down Industry reacts to cash rate decision

The Reserve Bank of Australia has announced its decision to leave...

taxes850 Ignorance of extended asset write-off a boon for brokers

More than a third of SMEs are unaware of the extended instant ass...

FROM THE WEB