Reported about 22 hours ago
Fitch Ratings has highlighted significant uncertainty regarding the repayment capabilities of vulnerable UK homeowners whose debts are bundled into residential mortgage-backed securities. A surge in mortgage rates has resulted in a notable increase in delinquencies among 'nonconforming borrowers,' with arrears rising substantially between December 2021 and November 2024. These delinquent loans, characterized by looser underwriting standards, pose potential cash flow challenges for bondholders if borrowers fail to repay upon loan maturity. Servicers are currently lenient with delinquents, but the composition of the mortgage pools is shifting towards weaker financial positions.
Source: YAHOO