Manufactured Housing Problems

The ratings on nine classes from two manufactured housing transactions linked to Conseco Finance Corp. have been lowered by Standard & Poor's Ratings Services and removed from CreditWatch with negative implications.

S&P attributed the downgrades to the poor performance of the underlying pools of manufactured housing contracts and the resulting decline in credit enhancement.

The rating agency said recovery rates on liquidated collateral have "plummeted" for both deals since Conseco has become more reliant on a wholesale liquidation strategy after suspending its MH financing business and filing for bankruptcy in December 2002.

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