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James Mitchell
The number of mortgages in arrears increased in the fourth quarter of 2010, new research has found.
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According to Fitch Ratings’ ‘The Dinkum Index’, the number of home loans more than 30 days in arrears increased to 1.37 per cent from 1.30 per cent in the third quarter.
"Arrears unexpectedly increased in [fourth quarter 2010], mainly as a result of more delinquent borrowers migrating into the 90+ days arrears bucket, as they were unable to cure their delinquent status,” Associate Director in Fitch's Structured Finance James Zanesi said.
The rise surprised analysts as preliminary November data was in line with third quarter results and no specific event was expected to affect mortgage performance in the fourth quarter.
Despite the initial shock, poor mortgage performance is expected to continue in the first quarter of this year driven mainly by the usual impact that the Christmas spend has on first quarter mortgage performance.
