Fitch: 2006, 2007 subprime RMBS prices improving
Subprime prices within two of the most-maligned vintages of residential mortgage-backed securities are showing signs of stabilizing, according Fitch Solutions, the distribution channel for Fitch Ratings content. The agency's total market price index for the RMBS sector through September was 9.85, which is nearly flat with the previous three months, according to analysts. But Fitch said RMBS prices from the beleaguered 2006 and 2007 vintages improved last month, climbing 15% and 10%. The gains follow "significant price declines in August" for both vintages, analysts said. "Loan modification programs are becoming more successful in stabilizing serious delinquency rates, which is helping stabilize asset prices for both 2006 and 2007 vintages," according to Kwang Lim, a director at Fitch. Analysts said prepayment activity continues to slow down and prepayment rates will continue dropping through the winter, according to Fitch. "Though there are concerns that these declines partially reflect a lower credit quality pool on aggregate," Fitch senior director Alexander Reyngold said. Write to Jason Philyaw.