Fitch Ratings sees relatively smooth sailing for residential MBS this year while times are tough in the CMBS market, and the worst could be yet to come.

As AI becomes ubiquitous in both the origination and securitization of loans, the U.S. regulatory framework is likely to evolve closer to the stricter rules used in the European Union.

Most impacted securities have already made the transition from the London Interbank Offered Rate. S&P expects the LIBOR Act will minimize the risk on the remainder.