Moody's Investors Service warns on credit data amnesty

Posted On Thursday, 17 October 2013 12:22 Published by
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Removing adverse credit information from public records will negatively impact on the rating of residential mortgage-backed securitisation and asset-backed securitisation transactions.

A report by Moody's Investors Service advised that the removal "will reduce the amount of information available to originators to assess the creditworthiness of new borrowers", according to the newspaper.
 
It could also impede responsible lending and borrowing practises, which would increase credit risk.
 
The report was released in response to a Cabinet statement issued in September which said Cabinet had approved recommendations by the select committee on trade and international relations.
 
The committee's guidelines sought to address the issue of access to credit by those South Africans who could afford it.
 
There were consumers who might have paid their debts in full, and were in a position to afford credit, but whose access was impeded by negative credit information on their record.

Source: sapa

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