Fitch foresees rapid rise in low doc loan arrears

Fitch Ratings said that its measure of home loan arrears on securitised home loans increased slightly over the last quarter, but said arrears on low doc loans were more than two and a half times as high, and said that arrears on low doc loans would rise further. Fitch said that its “dinkum index” shows that arrears of 30 days or more increased to 1.32 per cent as at June 2006, up from 1.19 per cent at March 2006.
Fitch said it expected delinquencies of 30 days or more on low doc portfolios to reach 4.0 per cent by the end of 2006, and to then stabilise at a level of between 4.5 per cent and 5.0 per cent.

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