PRESS RELEASE
Mortgage Backed Securities News from MortgageDaily.com
DALLAS — (August 13, 2007) As the performance of nonconforming mortgage-backed securities has withered, the ratings agencies have been busy issuing warnings and downgrades, according to https://www.mortgagedaily.com — the dominant source of online news for the mortgage industry.
Standard & Poor’ Ratings Services said it might lower the ratings on $2.2 billion in cash flow and hybrid collateralized debt obligation transactions. It also warned it might do the same on nearly $1 billion in vintage 2005 and 2006 Alt-A RMBS.
“These actions reflect a rising level of delinquencies among the Alt-A collateral supporting these transactions,” S&P said.
More than $1.5 billion in Ameriquest Mortgage Securities Inc. transactions were downgraded by Fitch Ratings. Fitch also downgraded $1.06 billion in Long Beach Mortgage Loan Trust subprime transactions, $682.2 million in subprime Structured Asset Securities Corp. mortgage pass-through certificates as well as $1.47 billion in SAIL certificates.
Prior to those actions, Fitch had downgraded $2.4 billion in subprime RMBS, noting the poor second lien performance played a role in the action.
Fitch announced several criteria revisions to its mortgage default and loss model for RMBS. Among factors deemed more risky were continued deterioration in home prices, short-term and hybrid adjustable-rate mortgages, and low documentation loans.
Moody’s Investors Service reported delinquency rose 72 basis points during May on home equity issues it rates. Meanwhile, jumbo delinquency also rose — albeit not as much as home equity.
Moody’s warned late last month that the performance of the lowest grade of Alt-A loans made last year closely resembles the performance of 2006 vintage subprime loans. The findings led the agency to revise its ratings methodology on those loans.
Luminent Mortgage Capital Inc. recently dislcosed liquidity problems, noting the secondary market for mortgage loans and MBS “has seized-up.” In its decision to boost conforming business, IndyMac cited an illiquid secondary market and difficulty trading even the AAA bond on private MBS transactions.
A Securities and Exchange Commission spokesman told MortgageDaily.com the agency’s subprime group is working with federal banking regulators to scrutinize activity on collateralized-debt obligations.
Read complete mortgage-backed securities news at:
https://www.mortgagedaily.com/News/MBS.asp
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