Business Data News

According to Moody’s rating agency, delinquencies in prime RMBS rose to 0.9 per cent in the second quarter of 2008, up from 0.6 per cent in Q2 2007. It says this is the highest average delinquency rating since the current Master Trusts programmes were created.

But it was Mound, Bank of Scotland’s Master Trust, that is suffering worst of all the UK prime RMBS with arrears of 4.1 per cent. This was followed by Northern Rock’s Granite which has 1.3 per cent arrears and HBOS’ other RMBS Master Trust, Halifax’s Permanent, which came in third with 1.2 per cent delinquencies as of Q2 2008.

Recently fellow rating agency Standard & Poor’s revealed that sub prime RMBS delinquencies were on the rise, but this study by Moody’s confirms that prime mortgages are also slipping into arrears. The average LTV on a mortgage within these RMBS is only 66 per cent.

The report also comments on the way that lenders have handled borrowers in arrears. It says: “While the increase in delinquencies has been relatively mild so far, the rise in repossessions has been marked. This may be an indication that lending organisations are reverting to court filings for repossessions more quickly than before.”

This week the Council of Mortgage Lenders wrote to the Chancellor promising that its members would do all they can to avoid repossessions.