Moody's downgrades billions more in RMBS
Ratings agency Moody's Investors Service (MCO) saddled several additional batches of residential mortgage-backed securities with downgrades over the past three days, including a group of Alt-A RMBS securities valued at $1.3 billion issued by 11 different entities. Moody's initiated similar actions against other RMBS securities in early March. The issuers of the securities valued at $1.3 billion total include Charlie Mac Trust 2004-1, Compass Residential Mortgage Trust 2004-RI, FNBA Mortgage Loan Trust 2004-AR1, Global Mortgage Securitization 2004-A, Greenpoint Mortgage Loan Trust 2004-1, Metropolitan Asset Funding Inc., Newcastle Mortgage Securities Trust 2004, RFSC Series 2001-RM2 Trust, Sequoia Mortgage Trust 2003-2 and Sequoia Mortgage Trust 2004-3. The agency also downgraded the ratings of 47 tranches of Alt-A residential-mortgage backed securities valued at $503 million and issued by Homestar Mortgage Acceptance Corp. in 2004. Collateral backing the Homestar loans includes first-lien, fixed and adjustable rate Alt-A residential mortgages. "The actions are a result of deteriorating performance of Alt-A pools securitized before 2005," Moody's said "Although most of these pools have paid down significantly, the remaining loans are affected by the housing and macroeconomic conditions that remain under duress." Moody's also downgraded the rating class of Lehman Mortgage Trust 2008-4 from B3 to Caa1 on the grounds that it has revised its loss expectation on a pool of mortgages backing the underlying certificate. The underlying certificate is backed by first-lien, Alt-A and residential mortgage loans. Another large downgraded involved Moody's ratings on 93 tranches of Alt-A deals issued by Bear Stearns Asset-Backed Securities Trust, which are valued at more than $1 billion. "The actions are a result of deteriorating performance of Alt-A pools securitized before 2005," Moody's said. "Although most of these pools have paid down significantly, the remaining loans are affected by the housing and macroeconomic conditions that remain under duress." Write to Kerri Panchuk.