Jumbo Galore

Last week\'s residential mortgage ratings actions
By SAM GARCIA
5/16/2002

Fitch Ratings assigned Altegra Credit Company an 'RPS3+' residential primary servicer rating for Alt-A and subprime mortgage loans, and an 'RSS3' residential special servicer rating. The 'RPS3+' ratings are based on Altegra's capable loan administration processes and established internal controls, and the 'RSS3' rating reflects Altegra's success in restructuring its operations to incorporate valid collection and loss mitigation procedures and practices, the tightening of default timelines, implementation of effective default technology, and the establishment of formal default training programs. All of these ratings reflect the financial strength of Altegra's parent, National City Corporation, the company's experienced management team, and its technology resources.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within each of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating.

Moody's Investor Service rated classes of Sequoia Mortgage Trust 6 securitization of jumbo adjustable-rate mortgage (ARM) loans at 'Aaa' to 'Baa2'. The Aaa rating is based on the level of subordination and Moody's confidence in the loan selection process. The loans were originated by Morgan Stanley Dean Witter Credit Corporation primarily through referrals from it's network of financial advisors, and were purchased by Redwood Trust, Inc. Borrowers on these loans were able to pledge securities instead of making cash down payments. The weighted average loan-to-value (LTV) is 65%, and approximately 30% of the pool is backed by properties whose values are three to six times the median property value for their zip code.

Classes of The Boston Company's MRFC residential mortgage pass-through certificates (RMPTC's), series 2002-TBC1 were rated at 'Aaa' to 'B2' by Moody's. The 'Aaa' ratings are based on the level of subordination and the strong credit quality of the mortgages, as evidenced by the excellent historical performance of the company's previously securitized deals. The $161 million in 30-year ARM's have a weighted average LTV of 64%, and many of the properties are expensive second homes and investor properties.

Fitch rated classes of C-Bass RMPTC's, series 2002-CB2 at 'AAA' to 'BBB', reflecting the subordination levels, the quality of the loans, the soundness of the legal and financial structures, and the capabilities of Litton Loan Servicing LP as servicer. The loans were originated or acquired by various originators, including New Century Mortgage (41.39%), Accredited Home Lenders, Inc. (15.30%) and Fremont Investment and Loan (5.82%). The first of two loan groups -- about $194 million -- includes FHA, VA and non-government loans with a weighted average combined LTV of 76.32% and a weighted average coupon (WAC) of 9.02%. More than 30 percent of the first group's loans are in California. The second group consists of loans with an average balance of $152,839 that total more than $75 million. The weighted average CLTV on the second group is 75.49%, the WAC is 8.70%, and nearly half the loans are in California.

Class B2 of Residential Accredit Loans Inc., series 1999-QS14 was downgraded by Fitch as a result of a review of the level of losses incurred to date and the current high delinquencies relative to the applicable credit support levels. Remittance information indicates that 1.63% of the pool is over 90 days delinquent, and cumulative losses are $479,912 or 0.22% of the initial pool.

Alaska Housing Finance Corp.'s $200 million home mortgage revenue bonds, 2002 series A and B were rated at 'AAA' by Fitch. The bonds are expected to be insured by Financial Security Assurance Inc. The bonds will be sold as variable-rate tender option bonds and are assigned a short-term rating of 'F1+', reflecting the credit quality of the initial liquidity support for the bonds' tender features. Bond proceeds will be used to purchase qualified mortgage loans already originated under this program (approximately $117 million) and finance new qualified loans. Of the warehoused loans, more than one-half (56%) of the loan balance is covered by FHA insurance, 16% is covered by VA guarantees, 10% carries private mortgage insurance, 7% is RHS-guaranteed, and 11% covers loans with LTV's of less than 80%, and are therefore not required to have insurance or guarantees.

Fitch upgraded 204 classes of the following RMPTC's as a result of low delinquencies and losses, as well as increased credit support.

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