Mortgage News
Moody’s warns of defaults on remortgages
Moody’s Investor Services has said remortgages, high LTV loans, self-certified products or fast track loans may lead to a higher probability of default in its report ‘What drives UK mortgage loans to default’.
In its report, ‘What drives UK mortgage loans to default’, based on Moody’s performance data from UK residential mortgage-backed securities master trusts and prime transactions, the ratings agency found that certain loan types and characteristics increase the likelihood of missed payments.
Jonathan Livingstone, assistant vice president – analyst at Moody’s and co-author of the report, said: “The performance of loans with these adverse characteristics will continue to be closely assessed to ensure that the adjustments assumed in the rating
analysis reflect the credit risk of these loans.”
Other adverse characteristics noted by Moody’s include borrowers close to retirement age, loans on high value properties and properties without full internal valuations.
The effect of such factors may increase if the economic downturn continues.
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