During the month of November, mortgage defaults continued to rise. But mortgage ratings firm Moody's had said that the Government's planned extension to the moratorium on legal proceedings may end up undermining the ability of the banks to raise capital from mortgage-backed bond investors.

In the past year till November, the number of mortgage-backed bonds in which the underlying loans had not been paid for, for over 90 days that is, had hiked by a whopping 123%. The data has been confirmed by Moody’s Investors Service. Also, the proportion of outright defaults increased by 218% during the period.

The figures shared by Moody's also revealed that the number of mortgages unpaid for over 360 days more than tripled for November 2009, as compared to the same month in 2008.

The agency has further said that its outlook for the residential mortgage-supported securities market is "negative", while stressing that weak demand and the fact that supply has managed to outrace it by a huge margin, will lead to a fall in prices of residential properties during the year.