Industry analysts are seeing signs that the slowdown in the Spanish housing market is beginning to leave its mark on Spanish RMBS deals. A report published by Fitch Ratings last week said that the slower growth in house prices weakened the recovery cushion for Spanish RMBS deals and is beginning to impact arrears, particularly for the less-seasoned recent transactions.

"The likelihood of a rise in arrears is driven by increasing interest rates, a slowing down in the economy and new products being offered outside lenders' areas of expertise, backed by riskier collateral," reported Fitch analysts. "The increase in Euribor in the past 12 months has also raised monthly installments."

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