Interpac Business and Migration Solutions Melbourne Australia

(Mar 30 2010)

RESERVE Bank of Australia assistant governor Guy Debelle says a recovery in the country's securitisation market has encouraged some small mortgage lenders to return to the market.

Speaking at a conference in Sydney today, Mr Debelle said "smaller lenders' market shares have risen slightly over recent months, though they are unlikely to return to pre-crisis levels anytime soon" with the country's four largest banks having significantly improved their market share during the crisis. Mr Debelle said smaller lenders have become more competitive because securitisation was becoming "a more viable source for lenders".

The government since October 2008 has supported RMBS, with the Australian Office of Financial Management already injecting more than half of an allocated $16 billion into RMBS. But the AOFM isn't interested in buying the riskiest tranches and neither are investors just yet. Still, Mr Debelle said with the broad improvement in securitisation, partly with help from the AOFM, the mortgage market is competitive.

In a further sign of improvement, Mr Debelle said the proportion of banks' on-balance sheet housing loans that were overdue or impaired has tended to be stable in recent months. In December 2009, that level was 0.6 per cent of all loans, up from the low levels of 2002 to 2003, but low in absolute terms, said Mr Debelle.

(Source from: australian.com.au)