Irish residential mortgage-backed securities (RMBS) transactions are currently experiencing the most testing economic environment since the inception of that market according to a new report by Standard & Poor's. However, the report also found that while delinquencies are rising, the number of repossessions reported to date has been relatively low, and losses are currently negligible.
The report suggests a number of possible factors for the relatively low rate of repossessions, including the Code of Conduct on Mortgage Arrears scheme which prevents lenders from entering court proceedings until at least six months after arrears first arise--or 12 months in some cases-which could be lengthening the time from first arrears to repossession.
The report shows that average RMBS delinquencies in Ireland have increased to 3.9% from a figure of 2.1% in March 2008, while 90+ day delinquencies have more than doubled to 1.5%.
It also found that, as in other European countries, prepayment rates are falling, partly due to more constrained credit availability.