Fitch lowered an unprecedented boom today on second-lien RMBS, putting every single second-lien transaction rated by the agency since 2005 under negative ratings watch. So many classes were put on watch, in fact, that it took two press releases to list everything -- here is the first, and here is the second. From the press release(s):
Fitch Ratings has placed all classes of 58 U.S. RMBS subprime transactions backed by pools of closed-end second-liens (CES) on Rating Watch Negative. This action includes all classes from these transactions previously placed on Rating Watch Negative. The 58 transactions have an aggregate outstanding balance of approximately $12.1 billion. 35 of the transactions were originated in 2005, 22 were originated in 2006, and one this year. These transactions comprise the entirety of Fitch's rated portfolio of CES RMBS from those vintages. Although the performance of individual transactions varies, the CES sector as a whole has significantly underperformed from original expectations. Ongoing pressure from the combination of a declining housing market, interest rate resets and weak loan underwriting standards, has led to high delinquencies, rising losses and a rapid deterioration of credit enhancement for these securities.
Folks, this means everything -- all classes, all transactions. Even the "A" stuff.