(1888PressRelease)
May 24, 2008 - A report from credit ratings agency Standard & Poor’s revealed that subprime mortgages bundled into securities that were rated between 2005 and 2007 are continuing to increasingly default, and that delinquencies on credit cards and prime mortgages are rising. The situation is worsening in light of tighter lending conditions and a weakening economy.
Delinquencies of prime mortgages rose to 2.41% in the first quarter of 2008, up from 2.11%, and for subprime mortgages (mortgages to borrowers with poor credit histories) the figures were 21.73%, up from 19.41% in the last quarter of 2007.
These increases in delinquencies are due to the decline in refinancing options for borrowers, as lenders become more cautious, and to the large proportion of loans whose fixed or discount rates are due to lapse in the first half of this year.
Credit card delinquencies rose to 5.88%, up from 5.6%, while charge-offs (the point at which the lender views the debt as bad) rose to 6.51% in March, up from 6.17% in December. But Standard & Poor’s said the increase in the charge-off figure was attributable to Barclay’s acquisition of the Goldfish credit card unit, which brought a change in the unit’s charge-off policies to align these with Barclay’s.
Standard & Poor’s said it expects credit card delinquencies will increase in the foreseeable future as borrowers start to feel the effects of the slowing UK economy and as credit continues to be less available.
For press enquiries, please contact Phil Rendall on 020 7099 9026
Email: phil ( @ ) dhbuyers dot co dot uk
Web: www.decisionhomebuyers.co.uk
News provided by Decision Homebuyers, a leading UK property company offering a quick and simple solution for selling your home, no matter what the condition.
Decision Homebuyers carries out daily surveys of the national media to provide up-to-date news and commentary on the UK property market.
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