(Repeat for additional subscribers)
July 7 (The following statement was released by the rating agency)
Though slowing of late, strong U.S. home price growth since 2012 is helping recent vintage
U.S. prime RMBS borrowers by providing a cushion against any unexpected economic stress,
according to Fitch Ratings in its latest monthly prime jumbo trends report.
'Home price increases are slowing and some regions may still be vulnerable to a
correction, but most recent vintage RMBS borrowers will still be left with more
equity than they had at origination even if home prices fall 10%,' said Managing
Director Grant Bailey.
Weighted average combined loan-to-values have improved for deals originated
between 2011-2013, as shown below:
--2011: to 50% from 64%;
--2012: to 55% from 68%;
--2013: to 59% from 68%.
This comes as home price growth continues to slow. When weighted by the
geographic concentration in prime RMBS pools, home prices increased at an
annualized rate close to 5% in first quarter-2014, down from double-digit
increases last year.
The improvement in equity positions to date combined with the strong initial
credit profile of the prime borrowers is reflected in the low delinquency rates.
As of the most recent month's data, only 13 basis points of outstanding prime
RMBS borrowers were delinquent.
'U.S. Prime Jumbo RMBS Trends' is available at www.fitchratings.com or by
clicking on the below link.
Link to Fitch Ratings' Report: U.S. Prime Jumbo RMBS Trends