Taiwanese mortgagees among highest defaulters

Taiwan's higher loan-to-value loans had a higher gross default ratio of around 5%, while the one with lower LTV loans showed a better performance of 2%, says Moody's.

In a new report by Moody's, the performance of mortgage loans in outstanding RMBS originated in Korea, Hong Kong, and Taiwan was stable in 1Q2011 with no downward pressure evident on ratings in any of the three markets.

In the case of Taiwan's two RMBS deals, the one with higher loan-to-value loans had a higher gross default ratio of around 5%, while the one with lower LTV loans showed a better performance of 2%.

"The mortgage loans in Taiwan displayed the highest gross default ratio of the three markets. At the same time, the subordination in the two Taiwanese transactions is abundant at around 65% as a result of their sequential payment structures. Hence, we see no rating implications," says Kan Leung, a Moody's Analyst and author of the report.