Fitch Ratings said that the performance of U.K. nonconforming RMBS continues to deteriorate, with higher loss levels being the key driver behind negative rating action on these deals.

The recession in the U.K. has resulted in house prices falling and unemployment rising, with both factors having a direct effect on RMBS through loss severity levels and affordability. These are considered to be the two main drivers of worsening performance in U.K. nonconforming transactions.

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