More Unsolicited SF Comments are Likely due to Late-Cycle Behavior

Late-cycle credit behaviour is manifesting in securitisations more frequently of late, which has triggered more unsolicited commentaries from Fitch Ratings on structured finance deals not rated by the agency and in certain sectors, according to the rating agency in a new report.

Post-Crisis U.S. RMBS Continues Strong Performance

Prime performance remains strong through the first half of 2018, reflecting the high-quality collateral attributes strong macroeconomic conditions and continued home price growth, with 60+ delinquencies (DQs) averaging only 11 basis points for Fitch-rated prime transactions.

Fixed-Rate Still Loan of Choice for U.S. RMBS as LIBOR End Nears

Many U.S. mortgage borrowers are still tapping fixed-rate loans for their home financing against the upcoming termination in 2021 of the London Interbank Offered Rate (LIBOR), according to Fitch Ratings. This trend continues despite LIBOR being the most commonly used index for U.S. adjustable-rate mortgages (ARMs).

Idaho Joins Vegas as Most Overvalued U.S. Housing Markets

Home prices in two neighboring western states are moving out of step with most of the rest of the country. Home prices appear to be valued in line with long-term sustainable levels for much of the United States, rising approximately 4% in the second quarter. 

Bellemeade Re 2018-2 Ltd. Fitch-Rated Residential Mortgage Insurance Linked Notes

Fitch Ratings hosted a 30-minute teleconference to discuss the expected ratings and rationale of Bellemeade Re 2018-2 Ltd, the first Fitch-rated residential mortgage insurance linked notes transaction.

RMBS Industry Leaders’ Perspective on Risks & Weaknesses in US RMBS Reps and Warranties

Fitch Ratings hosted a teleconference on Tuesday, July 31 with industry experts to discuss risks and weaknesses in US RMBS Reps and Warranties. Fitch recently published a report on this topic, 'US RMBS Reps and Warranties in the Spotlight'

U.S. RMBS Non-Bank Servicers Expanding GSE and Government Portfolios

U.S. non-bank RMBS servicers are moving away from servicing delinquent borrowers and setting their sights increasingly on FannieMae, FreddieMac and GinnieMae loans, according to Fitch Ratings in its latest U.S. RMBS servicer handbook.

Global Virtual Investor Meeting Videos

This series features senior analysts across our structured finance teams answering the questions we regularly address in one-on-one investor meetings. It covers overall market trends, specific transaction performance, and broad economic issues to give you the insights and perspective you’d get at one of our in-person meetings.

Watch the Videos

More New Deals, And More Risk, for U.S. RMBS

A spike in new private label RMBS issuance has surfaced of late along with, as Grant Bailey, U.S. RMBS Group Head discusses, with some credit risk trends that are worth watching in the coming months.

Watch the rest of our Virtual Investor Meetings

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.

EMEA RMBS

Grant England and Alessandro Pighi compare and contrast the trends in the UK and continental European mortgage markets and discuss how Fitch approaches the rating of new lenders in the European RMBS space.