Monday, March 2, 2009
S&P Analyse MBSs
Standard & Poor’s examined the performance of loans bundled into bonds or notes. The data showed that “non-conforming” or subprime mortgages hit a record delinquency rate, those late by 90 days+, in Q4 2008, rising to 28.6 per cent of all such loans outstanding. S&P noted that the stock of repossessed homes stood at 3.5 per cent, up from 2.8 per cent at the end of the Q3 and 1.6 per cent in the first three months of 2008. Charge-offs rose to almost 6.9 per cent in December, the highest level since August 2007. Rising delinquency rates could make banks even more reluctant to lend. An estimated 70-80 % of all UK subprime mortgages have been packaged, and the data give a comprehensive overview of those loans.