$3B subprime in 2014 to $67B in 2017??
About 6 weeks ago, Canada's largest subprime lender [Capital One ?] almost collapsed. The gov't stepped in so we're all good, I guess.
Not looking good, and these Subprime will just make it worst, and global.
Rush of Australian securitized home loans tempts yield-starved Japanese
"By
Cecile Lefort and
Hideyuki Sano | SYDNEY/TOKYO
SYDNEY/TOKYO Australia has become the world's most active market for securitized home loans, with sales at their highest in a decade as lenders seek to take advantage of surging demand from yield-starved Japanese investors.
Issues of residential mortgage-backed securities (RMBS) total A$67 billion ($50.21 billion), with A$12 billion sold so far this year. Offshore investors have been big buyers, with Japanese to the fore, having previously shown little appetite.
The strong demand has come in the midst of a property boom that has seen Sydney and Melbourne home prices double since 2009, prompting regulators, the central bank and the International Monetary Fund to issue warnings over a potential market bubble.
While a surge in securitized debt and property boom might raise parallels with the U.S. subprime crisis that led to the 2008-2009 global financial meltdown, investors say they are getting far better regulatory protection in Australia than they had in the United States back then.
John Sorrell, head of credit at Nikko Asset Management in Sydney, said there would have to be a catastrophic situation in Australia to see losses on triple A rated RMBS.
"You'd have to have a 30-40 percent house price drop and half of the borrowers in the RMBS pools defaulting. I don't see that happening," he said........" more
here
Australia 'at the front' of growing subprime mortgage market
The World Today
By business reporter
Pat McGrath
Updated 26 Aug 2014, 4:04pmTue 26 Aug 2014, 4:04pm
They triggered an economic meltdown in the United States and sparked the global financial crisis, but subprime mortgages are staging a revival in Australia.
Ratings agency Moody's says Australian lenders have doled out $3 billion worth of the non-conforming home loans over the last 18 months.
Prime mortgages are those that typically go to people with good credit scores, secure jobs and existing, well-serviced loans.
Moody's analyst Robert Baldi says non-conforming, or subprime, borrowers tend to have patchier personal financial histories.
"We're looking at things like prior bankruptcies or prior defaults in their credit history past," he explained.
"If the borrower is a non-resident, for example, or it's a jumbo loan, these would all fall outside of the lenders' mortgage insurance criteria and would classify the loan as non-conforming."
Essentially, subprime loans are those going to borrowers with a much higher risk of default that a typical loan. ... more
here
