Concerns for mortgage backed securities
July 30, 2009
Moody's says it has concerns over the performance of residential mortgage backed securities collateral over the next 12 to 18 months.
While it has no immediate concerns in regards to performance it is concerned rising unemployment and an uncertain global outlook will impact on the market.
Meanwhile, the supply and demand imbalance in commercial mortgage backed securities has continued in the first half of 2009.
It also says that while unemployment is rising, the labour market is still relatively resilient - suggesting some mitigating factors to any deterioration in performance for both asset classes.
Moody's notes however that collateral performance is unlikely to have much impact on ratings.
