Jeff Lazerson, the company's chief executive, says this prevents lenders from increasing the interest rates of borrowers in marginal areas.
Bank regulators in practically every country have been working on Basel 2. They have devised a system for banks in about 100 countries to hold levels of capital that more closely reflect the actual risks borne by the bank in terms of the credit rating of borrowers, the exposure to derivatives and the volatility of securities.
Although in recent months 90% of new home loans have been taken out on a fixed rate, millions of borrowers remain on variable-rate mortgages, some of them explicitly linked to the bank base rate and some subject to change at their lenders' discretion.
Simon Jones of Savills Private Finance says that given the choice between a "best buy" two-year fix, such as the 3.54% deal currently on offer from Britannia Building Society or a 25-year 5.89% rate, "99% of borrowers will go for the cheaper rate".
Credit card delinquency rates — the ratio of borrowers who are at least 90 days behind on one or more cards — are expected to remain low, even though they may rise to 0.87 percent at the end of next year from 0.83 percent now.
Many of those borrowers probably qualified for the plans before they defaulted, providing evidence for a concern voiced by Deputy Treasury Secretary Sarah Bloom Raskin in April of last year, when she challenged the Education Department and its loan servicers for high rates of borrower defaults given the existence of generous repayment plans.
(The delinquency rate is the ratio of borrowers who are at least 60 days past due on their payments. The mortgage delinquency rate peaked at the end of 2009 at 6.89 percent).
Often, as well as a higher rate of interest, borrowers are charged around £30 for going overdrawn, and pay further charges for every failed transaction such as a bounced cheque or direct debit.
As the Federal Reserve has cut interest rates, millions of borrowers have refinanced their home loans to reduce costs.
As for default rates, 2.4% of borrowers have fallen 31 to 120 days behind in their payments, while 3.6% are more than 120 days behind.
