Fitch Ratings downgraded the ratings of 154 loan classes packaged within 52 U.S. Alt-A and subprime residential mortgage-backed securities deals.
Despite the downgrades, the company still affirmed 365 classes within the same 52 deals.
Fitch enacted the downgrades after it reviewed the performance of loans across the RMBS transactions and found “unexpected deterioration in the mortgage pools collateralizing the bonds” as well as limited cash flow to pay for the bonds due to higher mortgage modification activity and shifts in loan servicing practices, Fitch said.
About 82% of the downgraded mortgage bonds were already on negative outlook watch. In addition, 95% of those downgraded saw revisions of 1 to 2 ratings categories.
Downgrades were especially pronounced in classes tied to Countrywide mortgages. Countrywide was purchased by Bank of America (BAC) in 2008. There were several downgrades launched within the CWALT Inc. 2004-9T1 deal. CWALT is short for Countrywide Alt-A.
Fitch downgraded two classes within the CWMBS Inc. 1998-12 deal (Countrywide Home Loans). In addition, several of the downgrades hit classes tied to the Banc of America Alternative Loan Trust 2003-5.
Write to Kerri Panchuk.
