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Fitch data reveals European RMBS arrears

  • 04/09/2009
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The latest Fitch Ratings data on residential mortgage-backed security (RMBS) transactions has revealed the number of home mortgages in arrears continued to rise across Europe.

While European governments continue to search for a way to restart the RMBS market, rising mortgage defaults are causing the market to deteriorate further. Fitch’s arrears index is seen as a leading indicator of looming defaults.

The worst-hit markets were the UK and Spain, which also have the largest amount of outstanding RMBSs, around €605bn and €243bn, respectively. Figures show that the share of UK home mortgages in arrears rose to 2.23% in June, from 1.05% the
previous year.

Peter Dossett, analyst at Fitch, commented: “The recession is affecting homeowners and
leading to mortgages going into arrears.”

No UK RMBS issuers have deferred interest payments yet, but the ratings agency said it
believes that some non-conforming transactions were poised to do so. In its August report, Fitch cited six RMBS transactions issued in the past three years as likely to
defer interest payments

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