Severe arrears refuse to cure

Moody's Investors Service yesterday published its own estimates on the incidence of arrears on home loans within pools of mortgage-backed securities in Australia. Moody's said average delinquencies greater than 30 days past due decreased to 1.13 per cent during the September 2006 quarter from the record high of 1.18 per cent in the June 2006 quarter. Average delinquencies greater than 60 days past due were steady at 0.62 per cent, Moody's said. The ratings agency said of this latter trend: “The fact that 30 plus days delinquencies fell and 60 plus delinquencies held steady reflects that severe delinquencies are getting difficult to cure due to cash flow problems resulting from the increasing cost of living and record indebtedness”.