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Arrears on Australian sub-prime and non-conforming loans continued to increase in June, new data released today revealed.
According to Standard & Poor’s Mortgage Performance Index (SPIN) the proportion of securitised mortgages in arrears by 30 days or more in sub-prime and non-conforming RMBS portfolios increased by 1.06 per cent to 15.68 per cent in June.
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However there was only a minimal increase in arrears on loans in prime RMBS portfolios – up just 0.01 per cent from May to 1.50 per cent.
Vera Chaplin, S&P credit analyst, said the SPIN showed that subp-rime and non-conforming borrowers were having “a real battle” and indicated that the outlook for such borrowers was relatively bleak.
“The decision by the Reserve Bank of Australia to cut official interest rates by 25 basis points earlier this month was welcome news for borrowers, however, it is unlikely to be enough to rescue those borrowers who are already in financial distress,” she said.
Published: 10-09-08
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