So what happens when borrowers who did meet sensible criteria, who were the right people to lend to, start defaulting? A warning from Moodys...

Arrears of more than 90 days on prime residential mortgage-backed securities have doubled from the level recorded by the Moody’s index last year, going from 0.9% in Q2 2008 to 1.8% in Q2 this year.

Rising unemployment and poor re-mortgage deals are a cause for concern into the future, they say.

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