...New and Late-Stage Arrears Stable: As of December 2014 the volume of new arrears remained stable at 1%, while.late-stage arrears were flat at 1.6%. Outstanding Defaults Reach New Peak: The steady pace of new defaults led to another increase in outstanding defaults. The growth is further fuelled by limited recovery income. New Lending Drives Prepayments: As of 3Q14, new loans granted to borrowers were up 7.2% compared to 3Q13. A significant portion of the new originations can be ascribed to refinancing (eg subrogations) loans, which is likely to have been one of the causes of the marginal increase in the prepayment rate to 2.4%, from 2.3% in 3Q14. Regional Home Price Disparity: In 2014 home prices declined by 1.6% year on year (yoy), to 16% from their 2008 peak. Price contraction was most pronounced in Southern Italy. New Payment Holiday Scheme: The new scheme will be effective from 2015 untill end- 2017. Fitch expects payment holidays to modestly increase....
