START MORTGAGES, the State's largest subprime lender, has had the debt ratings on three tranches of mortgages sold on to investors upgraded due to its efforts to reach settlements with delinquent borrowers and to "cure" non-performing loans.
Ratings agency Fitch said a significant number of Start's delinquent mortgages that end up in the courts are paid off, either through re-mortgaging or the private sale of the properties.
This was why, until July, Start's mortgage packages sold on to investors have not seen any losses.
Start raised almost €900 million to fund new lending by packaging loans and selling them on to investors as mortgage-backed assets in securitisation deals.
Fitch upgraded three tranches of Start's mortgages in its Lansdowne securities programme and affirmed another eight as either positive or stable.
It said arrears of three months or more were 16.91 per cent of loans in Lansdowne Mortgage Securities No 1 (LMS1), and 16.48 per cent in Lansdowne Mortgage Securities No 2 (LMS2).
Repossessions in both remained low - at 0.28 per cent of loans in LMS1 and 0.25 per cent in LMS2.
"The reason behind the low levels is the lengthy process of litigation, as well as continued efforts made by the servicer to either cure the non-performing loans or reach a mutual agreement with the borrower," said Fitch.
A spokesman for Start said its repossession record "reaffirms our policy of working with delinquent customers to find satisfactory solutions without recourse to repossession."
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