Fitch: Servicer Challenges Continue Affecting Recoveries on Sofoles-Sponsored RMBS

CHICAGO--()--Link to Fitch Ratings' Report: Mexican RMBS Update: Servicer Challenges Continue Affecting Recoveries on Sofoles-Sponsored Transactions
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701649

Persistent servicer challenges and declining recovery rates color the performance of Sofoles-sponsored transactions, according to a new Fitch Ratings special report about Mexican RMBS.

Performance varies across three segments: transactions sponsored by government entities Infonavit and Fovissste perform well; bank RMBS exhibit mixed credit metrics; and non-bank-sponsored transactions backed by Sofoles loans remain stressed.

Almost one-third of the Sofoles-sponsored RMBS portfolio rated by Fitch is 180+ days delinquent. Late-stage delinquencies signal more REOs in 2013, particularly since legal hurdles impeding liquidations have been resolved.

This non-bank segment continues to adapt to complications related to primary servicer substitutions that began in 2010. Some early evidence shows that portfolios with performance-based fee structures perform better than transactions with fixed-rate servicing contracts.

Relative to the non-bank segment, bank-sponsored RMBS perform well with minimal delinquencies and REO liquidations. However, within this segment, HSBC Mexico-sponsored transactions suffer from liquidity pressure and poor asset quality.

For more information, the full special report 'Mexican RMBS Update: Servicer Challenges, Declining Recoveries Point to Mixed Performance' is available at www.fitchratings.com or by clicking on the link above.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:
--'Rating Criteria for RMBS in Latin America' (Feb. 16, 2012);
--'RMBS Latin American Criteria Addendum - Mexico' (Aug. 2, 2012';
--'Continued Deterioration for Mexican RMBS' (Oct. 24, 2011).

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Contacts

Fitch Ratings
Greg Kabance, +1-312-368-2052
Managing Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Rene Ibarra, +52 81 8399 9130
Senior Director
or
Gregory Lane, +1-312-606-2304
Associate Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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Contacts

Fitch Ratings
Greg Kabance, +1-312-368-2052
Managing Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Rene Ibarra, +52 81 8399 9130
Senior Director
or
Gregory Lane, +1-312-606-2304
Associate Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com