Fitch downgrades Irish mortgage securities

Ratings agency Fitch has downgraded the ratings on six tranches of Irish residential mortgage-backed securities (RMBS), saying the absence of a credible threat of repossession helped drive up mortgage arrears.

“Arrears levels across the majority of transactions continue to worsen,” the agency said.

“In Fitch’s view, most of the rising arrears trend is driven by the moratorium on lenders taking properties into possession, which has affected borrower willingness to make payments on their mortgages.’’

“The return of repossession as a viable option for lenders should also ensure that the level of behavioural mortgage non- payment is curbed,” it said.

“Fitch expects this will slow the increase in arrears.”

Fitch, which also affirmed 32 Irish RMBS tranches, said the downgrades affect tranches from Celtic 11, Emerald 4 and Kildare.