Outlook Varies for CMBS and Nonconforming RMBS
As the performance of Alt-A residential mortgage-backed securities -- especially where second liens were simultaneously closed -- has seen rapid deterioration, commercial MBS are expected to see a more modest decline in performance. One new report looked at the impact of falling residential values and foreclosure costs on expected losses.

Standard & Poor's Ratings Services said it estimates a home-price decline of 33 percent from 2006 to 2009 when forecasting losses on RMBS, which translates into a 19 percent loss on the mortgages.

This reflects the impact of a foreclosure on the value, including the borrower's lack of maintenance on the property and the servicer's willingness to let a property go more quickly for less than the market value.
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New FHA Premiums Slated for Summer
Risk-based premiums on subprime loans insured by the Federal Housing Administration will be implemented within two months.

MGIC Cuts, Restricts Eligible Loans
MGIC said it will halt mortgage insurance on some properties, no longer insure a number of loan programs and significantly restrict several other programs.

Foreclosure Drama
Politicians in three states have recently proposed or implemented subprime foreclosure moratoriums ranging from one month to two years, while a Chicago-based group is recommending a plan that would turn foreclosed borrowers into renters then back in to borrowers. Meanwhile, a new report analyzed the impact of foreclosures on children.

N.Y. Assembly Approves 1-Year Moratorium
One of New York's state legislative bodies has declared a public emergency and passed a bill that would give judges the power to delay subprime foreclosures for up to one year. Another bill that passed requires mortgage brokers to have an agency relationship with loan prospects.

Downgrades Hit RMBS, CDOs & Scratch-and-Dent Deals
Since yesterday, downgrades have hit another 82 classes of Alt-A residential mortgage-backed securities, another half billion dollars in classes of scratch-and-dent deals and $2.4 billion more in classes of collateralized-debt obligations. But commercial MBS saw nine classes upgraded.

Alt-A, Subprime & Prime RMBS Downgraded
The past five days have seen ratings downgrades to nearly $10 billion in classes of collateralized-debt obligations, nearly 200 tranches of Alt-A RMBS and more than $3 billion in classes of subprime residential mortgage-backed securities issued in 2003 and 2004. Even prime RMBS from 2003 and 2004 saw classes downgraded, though just a single commercial MBS class was downgraded.

Banks Continue to Tighten Mortgage Guidelines
As banks continued to tighten their lending standards on subprime mortgages and home equity lines-of-credit, demand for those products was down, according to a new Federal Reserve report.

Ratings Halted on 2nd Liens
The performance of closed-end second liens has deteriorated so much that one major ratings agency has altogether abandoned ratings on securities backed the loans.

Downgrades Continue on 2003, 2004 Issuances
During the past two days, upgrades were limited to classes of a single commercial mortgage-backed securities issuer as more than $2.5 billion in subprime classes, mostly from 2003 and 2004 residential MBS, were downgraded.