Arrears on low-doc loans up

Delinquencies for low-doc mortgages stood at three per cent in December 2005, compared with delinquencies for prime loans of one per cent. Fitch Ratings last week published new measures of the incidence of arrears on low documentation loans which show that arrears of 30 days or more have doubled in the past 18 months and are three times those of the market as a whole. The ratings agency says that it expected low-doc arrears to continue to deteriorate further before stabilising.

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