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UK prime RMBS mortgage arrears double

Three-month arrears within prime UK Residential Mortgage Backed Securities doubled in Q2 2009 and are likely to increase, according to a report by Moody’s.

The ratings agency has found that, within UK RMBS, loans in arrears of 90 days or more accounted for 1.8 per cent of all loans, up from 0.9 per cent in Q2 2008.

It says as the UK economy continues to deteriorate and personal insolvencies continue to rise, the performance of UK prime RMBS will continue to deteriorate also.

It also found that while arrears increased, repossessions within the securitised loans decreased marginally -repossessions reduced to 6.6bps, down from 8bps in the first quarter of the year.

Moody’s says in Q2 2009 there was £5.691bn of loans with an installment overdue by 90 days or more, up from £5.12bn in Q1 2009.

Three-month arrears in Granite, Northern Rock’s securitisation vehicle, almost quadrupled to 4.67 per cent of all loans in Q2 2009, from 1.27 per cent in Q2 2008. HBOS’ Mound security three-month arrears decreased during Q2 2009 to 4.29 per cent, from 4.53n per cent in Q1.

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