The establishment of the Italian NPL market has spurred the growth of a subprime borrower base in the country. And ABS market participants are ready for the challenge. In fact, Italian servicers said that they are prepared to take on the task of servicing subprime mortgage portofolios and are confident about the extensive experience they have gained by working in the more established Italian NPL market.
Outside of the U.K., subprime mortgage products are not as developed. On the European continent, the Netherlands has developed a subprime market that focused primarily on near-prime borrowers. However, the rise in arrears and foreclosures across the Dutch market over the last few years has produced a larger group of subprime borrowers. Germany has also seen similar activity, though it might take some time before these products are refinanced via the securitization market. Italy, on the other hand, has had no subprime lending products being offered.