Fitch analysed the factors that trigger arrears for UK mortgages and said that while self-certified loans, interest-only loans and remortgaging loans appear more risky than standard loans, fast-track loans were not more risky than other loans.
The report said: “The evidence from Fitch’s regression analysis also shows that, in most cases, UK fast track loans have a lower probability of default compared to fully income verified loans.”
Gregg Kohansky, managing director of Fitch’s European RMBS team, said: “Lenders typically apply stricter credit scoring criteria for fast-tracked mortgages than for fully verified loans so the results are not necessarily surprising,”
In the Mortgage Market Review, the FSA has proposed that income verification will be required on all mortgage applications which would end the fast-track mortgage process.
