WASHINGTON (Sputnik) — The risk of default doubled for Russian mortgage loans from smaller financial institutions, Moody’s Investors Service said in a press release on Wednesday.
“Default risk doubles for Russian mortgage loans with high loan-to-value (LTV) ratios — while loans from smaller banks are more than twice as likely to default,” the release stated.
The stronger performance of mortgage loans from larger banks, the release added, derives from better access to funding and a smaller appetite for risk, which leads to more stringent underwriting standards.
The Russian mortgage market is highly concentrated among the five largest banks, according to the release, representing nearly 80 percent of mortgage origination.