| Fitch Says Bank of America Leading ‘Alt-A’ Player
Recent subprime RMBS ratings news October 27, 2003 By PATRICK CROWLEY |
| Bank of America may be having problems with its mutual fund business, but its residential primary servicer rating for ‘Atl-A’ products have been affirmed by Fitch Ratings. Bank of America has been in the headlines as one of the targets of an investigation by New York Attorney General Elliot Spitzer into alleged illegal mutual fund trading. But in a statement, Fitch praised the company’s performance in residential servicer ratings. “Bank of America’s experienced management team, strong financial performance and a robust internal control environment … (and) reflect Bank of America’s solid performing loan management and advanced integrated technology,” Fitch said. Fitch also said Bank of America, which is recognized as a leading originator and servicer of ‘Alt-A’ loans, serviced $2.8 billion of these loans as of June 30.According to today’s Wall Street Journal, Bank of America Corp. and FleetBoston Financial Corp. have agreed to merge in a $47 billion all-stock deal.
On the issue ratings front, Fitch has downgraded the First Union Home Equity Loan issue Series 1997-3 Class B to ‘BB’ from ‘BBB’ and removed it from Rating Watch Negative. The action was taken because of the poor performance of the underlying collateral and losses that have been higher than expected depleting the overcollateralization. Fitch has affirmed at ‘AAA’ the Class HEL notes in Residential Funding Mortgage Securities II Inc.’s series 2000-HS1 based on its own affirmation of Ambac’s ‘AAA’ insurer financial strength rating. And Fitch has moved on several classes of the $246.3 million alternative loan trust mortgage pass-though certificates series 2003-A3 issued by Nomura Asset Acceptance. Class A-1 and A-IO are rated ‘AAA’; Class M-1 is rated ‘AA’; Class M-S is rated ‘A’; and the privately offered Class B-1 is rated ‘BBB.’ The ratings reflect level of subordination, the target overcollateralization, monthly excess interest and collateral quality. The weighted average original loan to value ratio (LTV) is 74% and the pool has a weighted average FICO score of 707. Also taking ratings actions was Moody’s Investors Service. The agency assigned a ‘Aaa’ rating to the $258.8 million Wells Fargo Mortgage Backed Securities 2003-I Trust, saying while the credit quality of the aggregate pool is strong it is slightly weaker that other Wells Fargo 30-year adjustable interest-rate mortgage loans it has rated. Moody’s based the rating on the above-average quality of the adjustable rate 30 year jumbo mortgage loans and he level of subordination. The pool has a weighted average LTV ratio of 66% and a weighted average FICO score of 736. A rating of ‘Aaa’ was also assigned by Moody’s to the $861.7 million Bear Stearns Asset Backed Securities Trust 2003-AC4, a securitization of fixed rate, Alt-A mortgage loans that carry an average LTV ratio of 75.37% and an average FICO score of 695. Credit quality, credit enhancement, excess spread and overcollateralization were factors contributing to the rating, Moody’s said. GMAC-RFC’s $179 million RALI Series 2003-QS16 Trust securitization of 15-year fixed-rate Alt-A mortgage loans have garnered a ‘Aaa’ rating from Moody’s. The loans underlying the transaction have “better-than-average” credit quality for an Alt-A product, Moody’s said, adding the ratings were based on credit quality and credit enhancement available from subordination. The pool has a weighted average LTV ratio of 65.8%, which is low for the Alt-A sector, and a weighted-average FICO score of 728. And finally, GMAC-RFC’s $1.5 billion securitization of fixed-and adjustable-rate subprime mortgage loans — RASC 2003-KS7 — were also rated ‘Aaa’ by Moody’s. Ratings ranging from ‘Aa2’ to ‘Baa2’ were assigned to the mezzanine certificates. Driving the ratings were the issue’s credit enhancement provided through a combination of primary mortgage insurance, excess spread, overcollateralization, subordination levels and cross-collateralization. The pool has a relatively high FICO of 625 and a weighted-average LTV ratio of about 78.75%. |
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Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: [email protected] |
