Emerging from the COVID-19 Pandemic: Update on European Mortgage Performance
RMBSSummary
As we draw closer to the end of the current Coronavirus Disease (COVID-19) pandemic, it is evident that the anticipated deterioration in mortgage and housing markets across European jurisdictions has been avoided. Government-imposed restrictions on movement have been relaxed and uncertainty about economic activity for both consumers and businesses has eased.
As part of its review for this commentary, DBRS Morningstar:
-- Found resilient performance trends,
-- Observed positive house price movements; and
-- Hence, removed all coronavirus-related adjustments to our analysis.
“The reduction in the coronavirus-adjustments would lead to lower probability of default and loss given default for some portfolios backed by residential mortgages and/or properties. We do not expect immediate rating actions on residential mortgage-backed security and covered bond transactions, but we do expect some rating actions for certain Italian and Spanish nonperforming loan transactions”, stated Rehanna Sameja, Senior Vice President of European RMBS and Covered Bonds at DBRS Morningstar.