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Riskier mortgages on the rise, says ratings agency

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Julia Corderoy | 17 Oct 2014, 07:30 AM Agree 0
The recent rise of investor loans and interest-only loans could leave Australian banks exposed in the event of adverse market movements
  • Bottom Line | 17 Oct 2014, 09:49 AM Agree 0
    Yawn...probably included Construction Loans as interest only loans to make the figures what they wanted.
  • Denise Brailey BFCSA (Inc) | 17 Oct 2014, 04:46 PM Agree 0
    Fitch needs to pull its socks up. It cannot have an each way bet here. On one hand it says:that the risks of unmanageable losses in the mortgage portfolios of major banks are low. Well that's not our experience. Dud lending is on the increase. Then states: Since the introduction of the NCCP, low-documentation and other non-standard loans have decreased significantly. Well toxic loans still coming in under new NCCP as complaints rise. Then Fitch states: there has been strong growth in investor and interest only loans. Problem is many people who come to support groups are not "investors" they are spruiked, and they did not opt for Interest Only they have been advised to borrow on 30 year Interest Only loans and there will be mounting grief next year. Its the old bridging loan scams which were the highest closta nd most risky of loans. The only difference in 2014 is these questionable lending habits are now 30 year nightmares that implode after 5 years. As a support group we see the damage they cause. Who pays Fitch? Ah yes those who asked for ratings on RMBS packs that the Government abandoned after we raised the flag on that one in Parliament. Consumers need to see "warning" stickers on some of these products same as on packs of cigarettes, lest they be captured in debt and death traps.
  • Regional broker | 17 Oct 2014, 09:11 PM Agree 0
    Oh this is the same ratings agency that certified the junk mortgage bonds that caused the GFC as AAA? Why give them any space , they are just to me not credible .
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