Moody’s Investors Service has taken a negative view of U.K. banks that help mortgage borrowers in arrears by offering payment alternatives to avoid foreclosures. In declaring the banks’ so-called lender forbearance practices a “credit negative,” Moody’s said by their efforts, banks “may be delaying the inevitable recognition of higher losses owing to foreclosures,” adding, “It's fair to conclude that a large number of borrowers in distress with mortgages in forbearance will re-default, while the collateral value on which the banks rely to mitigate losses will fall further.”

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