Irish prime RMBS 90+ day delinquencies improved
The Irish prime residential mortgage-backed securities (RMBS) market continued to improve in the three-month period ended January, according to the latest indices published by Moody’s Investors Service.
The 30+ day delinquencies decreased to 16.96% of the outstanding balance in January, from 17.21% in October 2015. the 90+ day delinquencies decreased to 14.86% in January from 15.05% in October and the 360+ day delinquencies (used as a proxy for defaults) decreased to 10.87% from 10.97% over the same period.
Outstanding repossessions increased slightly to 0.40% from 0.38%, and cumulative losses rose to 0.21% in January from 0.18% in October. As of January, 15 Moody’srated Irish Prime RMBS transactions had an outstanding pool balance of EUR 29.60 bln compared with EUR 33.08 bln in January 2015, a year-on-year decrease of 10.50%.
Low interest rates and declining unemployment have supported transactions’ performance. Lenders’ forbearance measures also contributed to lowering arrears, which will stay high. The rise in house prices could be an indication of over-heating, but the likely explanation for the increase is a quicker recovery following the market’s dramatic fall in 2008-12 relative to other European countries.