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Moody's downgrades more than $17 billion of jumbo RMBS

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Moody's Investor's Service (MCO) started and finished the week by downgrading ratings on billions of dollars of jumbo residential mortgage-backed securities. In January, Moody's adjusted its criteria for RMBS issued before 2005 due to expected weaknesses in securitized pools created then. On Thursday, analysts slashed ratings on $1.28 billion in jumbo RMBS issued by GSR Mortgage Loan Trust, blaming the action on the deteriorating performance of prime jumbo pools prior to 2005. Specifically, Moody's downgraded the ratings of 79 tranches from 10 GSR prime jumbo deals and confirmed 14 tranches. The loans are backed by first-lien, fixed and adjustable-rate prime jumbo residential mortgages issued between 2003 and 2004. In addition, Moody's initiated downgrades on $12.4 billion of synthetic jumbo RMBS issued by RESI Finance Limited Partnership between 2003 and 2004. Analysts lowered ratings of 75 tranches and confirmed 20 tranches from eight transactions. Midweek, Moody's lowered ratings on $1.2 billion of prime jumbo RMBS issued by GMAC Mortgage. That move involved the downgrade of 79 tranches of securities from 10 deals issued by GMAC Mortgage Loan Trust.  The ratings agency also affirmed ratings for 27 tranches. Analysts also took action on $2.2 billion in prime jumbo RMBS issued by Countrywide Home Loans from 2002 to 2003.  The firm downgraded 200 tranches and confirmed 31 tranches from 29 deals issued by CHL Mortgage Pass-Through Trust. Earlier in the week, Moody's also slashed the ratings on billions of dollars worth of prime jumbo residential mortgage-backed securities issued by Wells Fargo (WFC) and Merrill Lynch (ML) this week. Write to Kerri Panchuk.

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