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Staff Reporter
Loans underlying Australian prime residential mortgage-backed securities (RMBS) that are greater-than-30 days in arrears remained stable at 1.69 per cent in July 2011.
According to a report published by Standard & Poor's Ratings Services, subprime RMBS arrears climbed 52 basis points higher to 12.18 per cent, with $1.63 billion in subprime RMBS outstanding, which is down by around $282 million in July compared to June 2011.
"Self-employed borrowers continue to be the group most affected by financial pressures," Standard & Poor's credit analyst Vera Chaplin said.
"In July, the Low-Documentation (Low Doc) Loan SPIN rose to 5.90 per cent, which is 0.01 per cent below the historical high in March 2011."
Compared to the previous month, it seems that most of the increase in the Low Doc SPIN is from arrears in the 30-to-60-day delinquency category. With an outstanding balance of A$6.4 billion, Low Doc loans now comprise 7.5 per cent of the total mortgage loan portfolio underlying Australian prime RMBS. This is about half of the value (A$12.8 billion) in April 2005, when the Low Doc SPIN was first recorded by Standard& Poor's.
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