Vegas Tops List of Most Overvalued U.S. Housing Markets

While national home prices in the U.S. remain strong, areas of overheating are surfacing across the country with Las Vegas topping the list of overvalued housing markets, according to Fitch Ratings in its latest quarterly U.S. RMBS sustainable home price report.

Stable Australian Mortgage Performance Despite Seasonal Arrears Increase

Australia's 30+ day mortgage arrears increased by 12bp to 1.13% in 1Q18 from the previous quarter, which is consistent with the seasonal increase in spending during the end-of-year holiday period.

Structured Finance Faces LIBOR Coordination Risk

Stronger provisions in transaction documentation ahead of LIBOR's discontinuation are an important step to limit the number of legacy structured finance (SF) contracts, Fitch Ratings says. However, much still needs to be done before the end of 2021 when forced LIBOR panel participation will end.

Opportunities and Rating Challenges for New Lenders in UK BTL

New lenders in the UK are increasing their presence in the buy-to-let (BTL) market, mostly without targeting untested borrower segments. Lack of performance data is the main challenge Fitch faces when rating new lender UK RMBS, but this lack can be overcome when a new entrant's lending criteria and products are in line with established lenders.

US RMBS Risk Diverging on Recent Investor Loans

A rise in non-traditional or no income borrower documentation has led to significant variation in the credit risk of recently originated investor property loans in US residential mortgage-backed securities (RMBS) deals. Loans that do not meet traditional residential or commercial underwriting standards have significantly higher credit risk than those that meet agency conforming documentation standards. 

Amazon HQ2 May Have Some Long-Term Credit Impact

The location of Amazon's second headquarters (HQ2) will not have a near-term impact on local government ratings or the housing market around the eventual winner. The jobs brought by HQ2 will only affect the local governments that can capture the attendant property, sales and income taxes. 

Energy-Efficiency Rules Add to Costs for UK BTL Landlords

We do not expect the number of properties affected or the size of the cost to have any material impact on the performance of UK BTL RMBS, but it is not clear how all BTL lenders will incorporate the new requirements into their underwriting criteria. 

More Overheating Emerges for Some US Housing Markets

Fixed mortgage rates have reached the highest level since 2014 and are likely to rise further. However, home price growth is likely to remain solid nationally in the near term due to strong economic growth and tight supply.

Resi Markets in 2017 Hurricane Regions Quickly Recovering

US residential markets affected by the particularly strong series of hurricanes in August and September are trending toward recovery. The speed of this recovery is expected to spare RMBS from rating downgrades.

2018 GSE Credit Risk Transfer Credit Update

Key discussion points include:

     ● Rating and loss projection update
     ● Second half 2017 CRT developments
     ● Collateral performance trends

Dutch Property Sales at Record High

Dutch home prices increased 7.6% in 2017. Apartments have increased significantly in price, rising faster than any other property type. Apartments have outperformed the market for each quarter since 2Q15. 
 

Global Housing & Mortgage Outlook

Fitch Ratings held a teleconference discussion following publication of its annual report on the latest trends in global housing and mortgage markets. The data-rich report provides cross-border and country-focused commentary on the main trends and themes in national mortgage and housing markets across 22 countries.

Global House Prices Will Rise, but Ideal Conditions to End

National house prices are forecast to rise this year in 19 of 22 markets, but growth is expected to slow in most markets and risks are growing as the prospect of gradually rising mortgage rates comes into view this year. Related: Eurozone Housing, Mortgage Recovery to Continue in 2018 I APAC's Housing Market Slowdown to Continue in 2018 I US Residential Prices Steady, Canada Slowing in 2018

Large Banks Continue to Pull Away from US RMBS Servicing Exposure

Basel III and ongoing regulatory scrutiny are leading big US banks further away from servicing residential mortgage loans while non-banks swoop in and beef up their portfolios, according to Fitch Ratings in its latest US RMBS servicer handbook.

Houston Home Prices Can Absorb Hurricane Harvey

"Early reports indicate home sales activity in Houston has recovered quickly and the reduced inventory is expected to support prices in the short-run," said Director Samuel So. This is not the first time that housing markets affected by major storms experienced a quick recovery.

US RMBS Servicers Eye Performance & Regulation in 2018

Servicing costs continue to rise driven by regulatory compliance requirements. Control over servicing costs and the increase in the number of states scrutinizing servicers are important trends worth keeping a close eye on next year. Despite the higher costs, servicers remain focused on performance.

Canada Mortgage Rules Mark New Effort to Reduce Risk

This will be constructive for the banking sector by further supporting long-term sustainability in Canada's residential real estate market. This also reflects a continued effort by federal and local governments to promote responsible lending and cool the Canadian housing market.