Our expectation for 2023 was for borrower arrears, including late-stage arrears, to grind higher from their low levels as higher interest rates and cost-of living pressures start to bite borrowers and this is slowly starting to play out.
While Gryphon’s defensive portfolio positioning is to buffer the potential impact of higher borrower arrears, our extensive loan level data continues to indicate that the most-at-risk borrowers will be resilient with a combination of elevated savings, over-payment history and continued low unemployment, all providing effective mitigants against financial stress.
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