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Home loan arrears on the rise

Home loan arrears on the rise

A new report has revealed a slight increase in housing loan arrears during November 2014 for both prime and sub-prime residential mortgage-backed securities (RMBS).

According to the report by ratings service Standard & Poor’s, loans in arrears by greater than 30 days for prime RMBS grew three basis points in November to 0.99 per cent, with total prime RMBS outstanding falling to approximately $126.5 billion.

Sub-prime arrears increased 12 basis points to 5.13 per cent, with total sub-prime RMBS outstanding falling to $2.8 billion as of 30 November.

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However, the report also revealed that the prime RMBS sector has continued to report lower levels of home loan arrears compared to 12 months ago.

Standard & Poor’s credit analyst Narelle Coneybeare said that while a seasonal increase over the coming quarter is expected, the outlook for arrears performance is stable.

“Sub-prime arrears increased in November in the longer dated arrears categories; however, the overall movements were modest and the outlook for this sector is also stable,” she said.

Home loan arrears on the rise
mortgagebusiness

 

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