New York-based Fitch Ratings says a recent decline in residential mortgage-backed securities (RMBS) has led to a “noticeably weaker rating performance for U.S. structured finance” when compared to the same period last year. Fitch made that assessment in its most recent mid-year Credit Action Report.
In just the first part of 2007, Fitch recorded 1,183 upgrades and 815 downgrades, compared to 1,825 upgrades and 377 downgrades during the same period last year.
In a press release Fitch said, “Most of the deterioration has emanated from U.S. subprime RMBS, with some spill over into the Alt-A arena, while prime RMBS is proving to be resilient and performing within expectations. The weak performance of loans issued last year, coupled with the significant rate resets scheduled for this and next year translate to continued weak performance and rating downgrades for the remainder of 2007.”