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Prime RMBS delinquencies remained high but steady in the third quarter of 2008, Moody’s Q3 Performance Review revealed yesterday.
According to the review, prime RMBS delinquencies remain at their record high of 1.47 per cent while low doc portfolios saw a sharp increase to 3.90 per cent.
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While lower interest rates should reduce pressure on arrears, Moody’s cautioned that rising unemployment was a concern.
“The upward trend in arrears is expected to slow due to recent reductions in interest rates although the situation will be tempered by an expected increase in unemployment,” Moody’s senior analyst Arthur Karabatsos said.
“Accordingly if we look ahead, unemployment will become the single most important factor behind credit quality.”
