OREANDA-NEWS. Fitch Ratings says in a new report that for the first time since 2005 Irish RMBS loans in arrears by more than three months reported a sustained decline to 17.7% in 2Q15, from their peak of 19.3% in 3Q14 and 18% in the previous quarter.

This recent change in trend is a result of ongoing servicing activities aimed at resolving long-term arrears cases and an improvement in the domestic macroeconomic environment. Nevertheless, market data provided by the Central Bank of Ireland shows that the portion of loans in arrears by more than 720 days is still rising, implying that more loan renegotiations are yet to take place.

In January 2015, the Central Bank of Ireland announced limits on loan-to-value and loan-to-income ratios on new mortgage loans. This is likely to lower credit growth but should have a limited impact on home price recovery.

The start of the European Central Bank's quantitative easing programme in January triggered a decrease in the three-month Euribor, leading to a fall in mortgage rates since the beginning of the year. Rates are expected to decline further and should remain low in the coming year. This is likely to support home price recovery, partially offsetting the impact of the new mortgage lending regulation.

Fitch's 'Mortgage Market Index - Ireland' is part of the agency's quarterly series of index reports. It includes information on the performance of residential mortgages, predominantly from RMBS transactions, but also those held on bank balance sheets. The report sets the housing market against the macroeconomic background and provides commentary on emerging trends. The report is available at www.fitchratings.com or by clicking on the link above.

The data behind the report can be viewed in the RMBS Compare, an Excel-based tool for producing charts and comparisons of mortgage market indicators along with RMBS transaction performance. The RMBS Compare is available at www.fitchratings.com or by copying the link below onto your browser.