The impact of changing dynamics in the capital markets and regulatory intervention have transformed mortgage underwriting from a diverse activity involving a range of competitive strategies into a standardised process.Fitch ratings head of Asia Pacific structured finance, Ben McCarthy, said the trend in mortgage delinquency rates among different classes of lenders since the financial crisis showed that all lenders had moved to pretty much the same underwriting criteria.Speaking at Fitch's Credit Insight Conference in Sydney yesterday, McCarthy said that back in 2008 there was a gap of more than 200 basis points in the arrears rates (30 days past due) of non-bank lenders and regional banks.What this indicated was different product sets, such as low-doc loans and high loan to-valuation ratio loans, and different risk appetites.Today the arrears gap across all types of lenders is around 20 basis points.McCarthy said several things happened over that period to cause the market to change. When the Government directed the Australia Office of Financial management to invest in residential mortgage-backed securities, the AOFM imposed a limit on the amount of low-doc lending that could be in the RMBS asset pools it would buy.Investors also put limits on the amount of low-doc and non-conforming loans they would accept in RMBS issues.And then, at the end of 2014, the Australian Prudential Regulation Authority gave lenders guidance on the amount of investor mortgage lending, high-LVR lending and interest-only lending it thought was appropriate.Fitch's Dinkum Index, which measures the performance of loans in prime RMBS pools, used to be 14 per cent low-doc and is now two per cent low-doc.McCarthy said Fitch's view on mortgage arrears is that they remain low. The Dinkum Index, which covers arrears from 30 days to beyond 90 days, was at 95 basis points in the December quarter - the lowest December quarter reading in 11 years.Factors contributing to low arrears are low interest rates, stable unemployment and high house prices.Only 0.8 per cent of loans are in "mining postcodes" (areas where at least 20 per cent of people identify as having a mining-related job).McCarthy said one area of concern for regulators was that the proportion of interest-only loans has risen over time. He said Fitch did not share the concern because there was evidence that owner-occupiers who took out interest-only loans actually paid down their principal over the term of the loan.