Asked at a credit market conference last week whether Australia had sub-prime lenders of the type that were getting into trouble in the United States, Standard & Poor's executive Leah Rhodes said the average arrears rate on portfolios securitised by local non-conforming lenders was 14 per cent.Rhodes said this arrears rate (measuring loan payments 30 days or more past due) was considerably less than figures being reported in the US market.But she warned that there was a wide range among the group of lenders included in the S&P survey.The non-conforming lender with the best arrears rate was Pepper Home Loans, with seven per cent of its loans 30 days in arrears.The worst was Mobius, part of Allco Finance Group, with a 23 per cent arrears rate.Rhodes said that if local lenders were engaging in the sorts of practices that have led US lenders into trouble it would show up in a portfolio such as that of Mobius.A spokesperson for Mobius said the arrears rate reported by S&P was not a reflection of the current structure of the company's business.For a start, the inclusion of penalty interest overstates the arrears rate by two percentage points.But the main point was that most of the high arrears can be ascribed to legacy portfolios. One came from HLP, which failed in February this year. The name of the second one as not disclosed.The spokesperson said Mobius has broadened its product range over the past year, offering a full suite of standard loan products in addition to non-conforming loans.Mobius works with more than 30 originators. According to the company "standards have tightened."