Loan modifications and reductions in servicer advances prompted Fitch Ratings to place 10 classes of U.S. residential mortgage-backed securities on negative ratings watch this week.
The classes, which are still investment grade, felt the impact of outstanding interest shortfalls tied to increased loan modifications and changes to servicer advancing.
Adjustments to mortgage payments in the form of loan modifications usually effect the level of interest cash flow that makes it back to investors in mortgage securities.
The 10 classes of RMBS are tied to 8 separate subprime, Alt-A, or scratch and dent deals.
See the chart below to review the deals on negative ratings watch.