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ISCOVER
Staff Reporter
Loans underlying Australian prime residential mortgage-backed securities (RMBS) decreased 15 basis points to 1.37 per cent in August 2012.
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According to research conducted by Standard & Poor’s Ratings Services, the drop in arrears can be attributed to several factors including the addition of four new prime transactions totaling $2.18 billion, the impact of interest rate cuts earlier in the year, and a cyclical pattern of declining arrears in the third quarter.
The largest reduction was in the arrears of more than 30 but less than 60 days bucket. The total prime RMBS outstanding increased slightly, to approximately $113.2 billion.
Sub-prime RMBS arrears fell by 20 basis points to 8.64 per cent in August, with $1.7 billion in sub-prime RMBS outstanding as of August 31.
Arrears of more than 60 but less than 90 days declined by 18 basis points from July, while severe arrears in the greater-than-90 days bucket rose 10 basis points to 4.48 per cent.
This remains the lowest level of sub-prime arrears since 2004.
