Greece's mortgage market is experiencing an uptick in volume. Favorable interest rates have led to more refinancing among borrowers, and lenders are continuing to experiment with new mortgage products to attract first time borrowers. However, what's good for the economy has translated into some trouble for existing RMBS deals, which are beginning to have prepayment troubles, according to industry experts.
Fitch Ratings recently upgraded three tranches and affirmed 19 others from seven Greek RMBS transactions. The upgrades reflect increasing credit enhancement levels in the deals. The rise is generated by the sequential note paydown of the notes and an increase in the principal payment rate of these deals as a result of more competition in the Greek market. "Over the past six to 12 months, the Greek mortgage market has experienced competition from lending banks," said Alison Ho, associate director at Fitch.