MBS Ratings All Negative

IndyMac Bank FSB’s residential servicer ratings for prime, Alt-A and subprime products, as well as its special servicer rating, were downgraded to RPS3+ from RPS2 by Fitch Ratings because of the Pasadena, Calif.-based company’s weakening financing condition.

Financial Freedom Senior Funding Corp. was also impacted by Fitch’s worsening outlook for parent IndyMac. The reverse lender saw its primary specialty-reverse servicer rating lowered to RPS3 from RPS3+.

Fitch downgraded the mezzanine and subordinate bonds of the following Alt-A residential mortgage-backed securities because of expected defaults and losses from delinquent loans:

• nine Greenwich Alt-A transactions securitized from 2005 through 2007;
• seven Deutsche Alt-A Securities Inc. issuances from 2006 and 2007;
• seven Wells Fargo Alternative Loan Trust transactions from 2005 and 2007;
• five Merrill Lynch Mortgage Investors Trust and Alternative Note Asset Trust transactions securitized in 2005 and 2007;
• five American Home Mortgage Assets transactions issued from 2005 through 2007; and
• two Wachovia Mortgage Loan Trust LLC issuances from 2005 and 2006.

Seven certificates from Merrill Lynch Mortgage Investors Trust, series 2007-SL1, were downgraded by Moody’s Investors Service because of the worsening performance of the underlying second liens.

Less than $0.1 billion in classes from Citigroup Mortgage Loan Trust, series 2004-RP1, 2005-HE2, 2005-SHL1 and 2006-SHL1 were downgraded by Fitch. The transactions are backed by scratch-and-dent loans.

Moody’s warned it might downgrade five tranches from the GMACM Mortgage Loan Trust 2005-AR shelf, and eight tranches from the RFMSI 2005-SA shelf. The jumbo loans backing the deals have had higher-than-anticipated delinquency relative to current credit enhancement levels.

In the commercial sector, two classes for $18 million of COMM 2000-C1 commercial mortgage-backed securities, series 2000-C1, were downgraded by Fitch as a result of increased loss expectations on the specially serviced assets.

Fitch also downgraded two classes for $21 million of Morgan Stanley Capital I commercial mortgage pass-through certificates, series 2006-IQ12, because of loss expectations on three specially serviced loans.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com