Fitch Lowers 58 MBS Second Lien Deals

Fitch Ratings has placed all classes of 58 U.S. residential mortgage-backed securities on subprime transactions backed by pools of closed-end second-liens on Rating Watch Negative.

The 58 transactions - 35 of which were originated in 2005, 22 in 2006 and one this year - have an aggregate outstanding balance of approximately $12.1 billion, the rating agency reported.

The transactions constitute "the entirety of Fitch's rated portfolio" of closed-end second-lien residential mortgage-backed securities from those vintages.

"Although the performance of individual transactions varies, the CES sector as a whole has significantly underperformed from original expectations," Fitch said. "Ongoing pressure from the combination of a declining housing market, weak loan underwriting standards and interest rate resets on the associated adjustable-rate first liens has led to high delinquencies, rising losses and a rapid deterioration of credit enhancement for these securities." (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com/