Fitch Updates Ratings Model; Projects Steep Housing Price Declines
By: PAUL JACKSON
July 24, 2008
HousingWire.com
Fitch Updates US RMBS Model, Warns on More Downgrades
Fitch Ratings said Thursday that it had enhanced its U.S. residential mortgage loss model, called ResiLogic, a key component of the agency’s overall approach to assessing U.S. RMBS new-issue ratings. While the new-issue market has been essentially dead for all of 2008, Fitch’s revisions suggest that the agency is preparing for where the market might be headed next: seasoned mortgage issuance.
They also suggest a very bearish take on housing prices over the next five years: Fitch said in its report that it is expecting home prices to decline by an average of 25 percent in real terms at the national level over the next five years, starting from the second quarter of 2008. (If we get enough monetary inflation people may keep the illusion of price appreciation. Twenty-five percent inflation over five years is probably a lowball estimate. - Jesse)
And that’s the base case scenario....
For more information, visit http://www.fitchratings.com.
"We must be faithful to the present moment or we will frustrate the plan of God for our lives. We should be grateful and love the vocation to which God calls us. This applies to every vocation because it is a privilege to serve God, even in the least capacity. Worry is a weakness from which few are entirely free. We must be on guard against this most insidious enemy of our peace of soul. Instead let us foster confidence in God, and thank Him for whatever he chooses to send us." Solanus Casey