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| More than 200 classes of Alternative-A residential mortgage-backed securities were downgraded due to deteriorating performance. Commercial MBS ratings, however, were mixed.
But first, the Mortgage Bankers Association issued a statement today in support of the Securities and Exchange Commission’s proposal to increase transparency in the mortgage-backed securities ratings process. The group, however, recommended against using a unique identifier for structured finance versus other investment products. “Consolidating all structured securities under a single unique identifier could cause investors to focus on the structure of the security rather than its asset quality,” MBA said. “Consequently, the proposal could reinforce the very behavior it seeks to extinguish.” Financial Freedom Senior Funding Corp.’s servicer ratings have been placed on review for a possible downgrade by Fitch Ratings and Moody’s Investors Service due to the weakened financial condition of parent IndyMac Bank F.S.B., which was take over by the Federal Deposit Insurance Corp. Higher-than-anticipated rates of delinquency, foreclosure and real estate owned in the underlying collateral relative to credit enhancement levels prompted Moody’s to lower the following Alt-A issuances:
Fitch announced that it enhanced its U.S. residential mortgage loss model, ResiLogic, impacting its expected loss assumptions and credit enhancement levels for RMBS. Seven tranches issued in three scratch-and-dent transactions from the Credit Suisse Mortgage Series CF shelf were downgraded by Moody’s as part of an ongoing, wider review of all RMBS transactions in light of the deteriorating housing market and rising delinquencies and foreclosures. Moody’s cited the same reasoning in its downgrade of 31 tranches from the Ameriquest / Quest Trust X shelf, which is also backed by scratch-and-dent loans. In commercial MBS activity, five classes of Chase Commercial Mortgage Securities Corp. 1998-2 were upgraded by Fitch due to additional paydown of 20 loans including the largest loan in the deal. Two classes of Bear Stearns Commercial Mortgage 1998-C1 were upgraded by Fitch because of increased credit enhancement levels due to the repayment of 58 loans, the liquidation of two loans, and scheduled amortization that have occurred since the last Fitch rating action. Morgan Stanley Capital I Trust 2006-IQ11 saw three classes downgraded by Fitch, reflecting the increase in specially serviced assets since Fitch’s last rating action in addition to an increase in Fitch’s expected losses on the specially serviced assets. Moody’s upgraded four classes of ROCK 2001-C1, series 2001-C1, due to increased defeasance and credit enhancement levels. Three Classes of Citigroup Commercial Mortgage Trust, series 2006-FL2, were downgraded and 11 classes were upgraded by Moody’s. Moody’s upgraded three classes of J.P. Morgan Commercial Mortgage Finance Corp., series 2000-C10, due to increased defeasance and credit support. Wachovia Bank Commercial Mortgage Trust, series 2005-C20, saw three classes downgraded because of expected losses associated with the specially serviced Macon & Burlington Mall Pool Loan. Two classes were upgraded and four classes were downgraded of Credit Suisse First Boston Commercial Mortgage Corp. 2002-CKP1 by Moody’s. DLJ Commercial Mortgage Corp., series 1998-CF1, saw two classes upgraded by Moody’s due to increased credit support from loan payoffs and amortization. Two classes of First Union–Lehman Brothers-Bank of America Commercial Mortgage Trust, series 1998-C2, were upgraded by Moody’s as a result of increased credit support from loan payoffs and amortization. Fitch downgraded one class of Greenwich Capital Commercial Funding Corporation, Series 2006-FL4, as a result of the Galleria Sheraton Metairie not performing to expectations. |
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Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com. e-mail:Â mtgsam@aol.com |
