Most severe mortgage arrears deteriorating: S&P

Home loan arrears improved overall in June 2006 from May 2006, though the most severe category of home loan arrears – those where borrower repayments are more than three months overdue – shows a deteriorating trend. Credit ratings agency Standard & Poor's on Friday said that its measure of all home loan arrears of 30 days or more on “prime” home loans eased to 1.14 per cent out of a stock of $135 billion in securitised home loans monitored by S&P. For “full documentation” loans arrears declined for the fifth month out of six, since peaking at 1.07 per cent in January 2006. S&P said the arrears on low documentation loans improved during the month, with arrears of more than 30 days declining to 2.22 per cent.