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Moody's says Taiwan's high loan-to-value loans stabilize.

Taipei, Sept. 24, 2010 (CENS)--Moody's Investors Service recently said that the performance of mortgage loans in outstanding RMBS (residential mortgage-backed securities) originated from South Korea and Hong Kong continued to exhibit low levels of delinquencies in the second quarter of 2010. Meanwhile, in the Taiwan, the performances of high loan-to-value (LTV) loans stabilized and delinquencies trended downwards.

In addition, there remains no downward pressure on the ratings in all three markets. The Moody's analysis appeared in its just-published Asia ex-Japan RMBS 2Q 2010 Performance Review.

For Korea, as of the end of June 2010, the gross default ratio was less than 0.2% of the outstanding pool balance for all transactions.

Moody's has a stable outlook on the performance of Korea's mortgage loan receivables. Although the Korean property market is stagnant, mortgage loans in the rated transactions exhibited low delinquencies because they are seasoned and have low LTV rations. The subordination in the transactions is sufficient for the ratings on the relevant notes, said Joe Wong, a Moody's analyst and co-author of the report.

For Hong Kong, the ratio of 30-119 days past due as a percentage of the outstanding pool balance was around 0.1-0.2%, which is negligible. In the report, Moody's also discusses the performance of mortgage loans in Taiwan's two cross-border RMBS transactions.

As of the end of June 2010, the gross default ratio as a percentage of the outstanding pool balance of Hsinchu International Mortgage I Limited (Hsinchu 1) was around 2% and for Hsinchu International Mortgage 2 Limited (Hsinchu 2), it was 4.4%.

Mortgage loans in Hsinchu 2 have higher LTV than Hsinchu 1. Hence, Hsinchu 2 has a higher default ratio. However, the gross default ratio of the mortgage loans in Hsinchu 2 has improved in the last few months, coming down from the peak of over 7% in December 2009 to 4.4% in June 2010, said Marie Lam, a Moody's senior credit officer and also an author of the report.
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Title Annotation:Moody's Investors Service
Author:Shen, Ben
Publication:The Taiwan Economic News
Geographic Code:9TAIW
Date:Sep 24, 2010
Words:331
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