Brazil recession likely to fuel higher mortgage defaults: Moody's

Brasília

BRAZILIAN banks will write fewer mortgages this year as delinquency rates climb amid the country's worst recession in more than a century, according to Moody's Investors Service.

State-owned lender Caixa Economica Federal, which issues almost three-fourths of housing loans in Brazil, also faces higher financing costs, imperiling its ability to write new mortgages, Moody's said in a report. Lower household income and higher costs for credit will weigh on demand for houses at least through mid-2017, the report said.