The performance of residential mortgage-backed securities (RMBS) markets in Europe, the Middle East and Africa (EMEA) showed deteriorating trends in most countries in the second half of 2011, according to a new report by Moodys.

The two largest prime RMBS markets, the Netherlands and UK, followed a moderately stable trend over the last year, remaining the best performing in EMEA region, said the Moody's Investors Service in its latest indices report.

German and French RMBS markets deteriorated slightly, while the Italian, Spanish and South African RMBS markets remained relatively stable, it said.

The performance of the Irish and Greek RMBS markets continued to deteriorate over the past year, it added.

In the 12-month period leading up to September 2011, most EMEA markets recorded a decrease in their outstanding pool balance.

According to Moodys, the Greek RMBS market recorded the most significant outstanding pool balance fall, with a 26.05 per cent drop to Euro3.6 billion.

Dutch RMBS and Portuguese RMBS markets were the only ones that recorded an increase in their outstanding pool balance in September 2011, with a rise of 11.76 per cent to Euro274,60 billion and 20.03 per cent to Euro22.51 billion, respectively.

On a country-by-country basis, Moodys said its 2012 outlook for collateral performance in RMBS transactions in Greece, Ireland, Italy, Portugal and Spain was negative.

Rising unemployment and falling disposable incomes resulting from slowing economic growth (and outright recession in some of these countries) will weigh on households' ability to service their debts,' the ratings agency stated.-TradeArabia News Service