In its latest Greek mortgage market index report, on the second quarter of 2013, Fitch Ratings said the recent rise in permitted variations in certain Residential Mortgage-Backed Security (RMBS) transactions has helped stabilize the arrears levels within Greek RMBS.
The portion of loans in arrears by more than three months excluding defaults as a percentage of collateral balance among Fitch-rated Greek RMBS transactions grew at a much slower rate in the past quarter compared to 12 months earlier.
In Q2 of 2013 this measure of arrears grew by 30 basis points to 5 percent. Fitch believes the true levels of borrower distress are being masked by the growing amount of permitted variations in a number of RMBS transactions.
These variations include temporary payment holidays as well as allowing borrowers to pay less than the scheduled amount on their mortgages.
House prices across Greece have continued to decline in the latest period with the peak to current decline reaching 30.7 percent.
Fitch has increased its expected average peak to trough house price decline to 42 percent from 33 percent. [Reuters]