By Diana Golobay
The majority — 60% — of remaining performing borrowers within ‘06- and ‘07-vintage residential mortgage-backed securities (RMBS) bear negative home equity, meaning they are underwater on their mortgages and owe more than their houses are worth.
This overwhelming presence of negative equity is hampering sustained improvement in RMBS performance, according to Fitch Ratings.
“[N]egative equity reduces a borrower’s inventive to pay their mortgage and limits their options when faced with financial difficulties,” said senior director Grant Bailey in a statement.
Continue reading Fitch Sees 60% of Current RMBS Borrowers Underwater