Fitch: Pre-Crisis Securitization Losses Fall Again on U.S. Housing Recovery

Loss trends on pre-crisis global securitizations continue to improve due in large part to the recovery of the U.S. housing market , according to Fitch Ratings in a new report.

Total losses on bonds issued between 2000 and 2008 dropped to 4.9% from 5% in last year's study. Total losses include both realized and expected future losses.

'Loss performance on 2000-2008 U.S. RMBS deals has continued its positive trend, falling further to 8.1% from 8.7% last year,' said Senior Director Gioia Dominedo. 'This is consistent with our revisions to home price and loan projections, which reflect the continued improvement in the U.S. housing and mortgage markets.'

The analysis also demonstrates the continued robust performance of post-crisis vintages. 'Transactions issued after 2008 are benefiting from higher-quality collateral and increased credit protection,' said Dominedo. The end result continues to be miniscule losses, with post-crisis vintages ranging from 0% to 0.05%. By contrast, pre-crisis losses peaked at 11% on 2006 vintage transactions.

Fitch-rated structured finance bonds issued between 2000 and 2014 had an original balance of US$10.5 trillion, of which 1.9% had been written off as of Dec. 31, 2014. Fitch expects total losses on these bonds to grow to 4%.