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ISCOVER
Staff Reporter
Loans underlying Australian prime residential mortgage-backed securities that are greater-than-30 days in arrears rose slightly in December, new research has found.
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According to Standard & Poor’s latest Mortgage Performance Index, arrears rose to 1.38 per cent from 1.35 per cent in November 2010.
And, this percentage is expected to climb further still in the first half of 2011 as financial stress among self employed borrowers heightens.
“We anticipate delinquencies to rise in the first quarter of 2011, as the impact of natural disasters in Australia may have temporarily disrupted some borrowers’ ability to meet payments, particularly self-employed borrowers who are more sensitive to changes in business conditions,” Standard & Poor’s credit analyst Vera Chaplin said.
But despite this negative sentiment, Ms Chaplin said overall, borrowers managed the increase in interest rates well through 2010.
