Servicing

Eleven tranches from two transactions issued by GSC Capital in 2006 have been downgraded by Moody's Investors Service. Six downgraded tranches remain on review for possible further downgrade, and four other tranches were placed on review for possible downgrade. The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, adjustable-rate, alternative-A mortgage loans.

Twenty-two tranches from four subprime deals issued by Structured Asset Investment Loan Trust in 2004 and 2005 have been downgraded by Moody's Investors Service. The downgrades were based on an "analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to expected losses," Moody's said. The transactions are backed primarily by first-lien, fixed- and adjustable-rate subprime mortgage loans.

Thirty-eight tranches from four transactions issued by Opteum Mortgage Acceptance Corp. have been downgraded by Moody's Investors Service. Ten downgraded tranches remain on review for possible further downgrade, and six other tranches were placed on review for possible downgrade. The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate, alternative-A mortgage loans.

Sixty-three tranches from 17 mortgage-backed securities deals issued by Bear Stearns have been downgraded by Moody's Investors Service. One tranche was placed on review for possible further downgrade. The downgrades were attributed to "an increasing proportion" of severely delinquent loans. "The timing of losses coupled with the passing of stepdown triggers for most of the transactions has caused the protection available to the subordinated bonds to be diminished," Moody's said. The collateral consists primarily of first-lien subprime mortgage loans, the rating agency said.

Moody's Investors Service is seeking market comment on five proposed enhancements to the securitization process for U.S. residential mortgage-backed securities. The specific enhancements are stronger representations and warranties, independent third-party pre-securitization review of underlying mortgages, standardized post-securitization forensic review, expanded loan-level data reporting of initial mortgage pool and ongoing loan performance, and more-comprehensive originator assessments. "Based on Moody's assessment of factors that have lead to recent underperformance of subprime and alt-A mortgage securitizations, Moody's believes that implementation of these enhancements will materially improve performance of future mortgage securitizations," the rating agency said. Moody's said the deadline for comments on the move is April 11. The rating agency can be found online at http://www.moodys.com.

Noting the housing downturn's disproportionate impact on minorities, groups of Hispanic, Asian, and African-American real estate professionals have put forth a "five-part plan of action" to protect ownership for people of color. Among other things, the plan calls for a national foreclosure prevention fund to help troubled borrowers. The plan, which was issued at the National Association of Hispanic Real Estate Professionals' annual legislative conference in Washington, recommends that the foreclosure prevention fund offer "realistic" loan modifications and workouts, including the use of "soft seconds." It also proposes that lenders be blocked from pursuing foreclosure until they have fully documented that all reasonable steps were taken to contact borrowers and provide them with a full spectrum of options. "Our communities are at great risk," said NAHREP chair Rebecca Gallardo-Serrano. The NAHREP was joined in recommending the plan by the Asian Real Estate Association of America and the National Association of Real Estate Brokers. Together, the three groups have 70,000 members.

Five classes of Structured Asset Securities Corp. mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades were as follows: class B3 of series 2001-2, from CCC/DR2 to CC/DR3; class B3 of series 2001-9, from CCC/DR2 to CC/DR3; class B5 of series 2001-16H, from CCC/DR2 to CC/DR3; class B5 of series 2002-5A, from BB to B; and class B5 of series 2002-AL1, from B to CCC/DR3. Fitch also placed two classes on Rating Watch Negative and affirmed the ratings on 83 classes from 27 SASCO transactions. The collateral consists of fixed- and adjustable-rate prime and alternative-A mortgages.

Seven classes of notes issued by Oxford Street Finance Ltd., a collateralized debt obligation that consists partly of subprime mortgage-backed securities, have been downgraded and placed on Rating Watch Negative by Fitch Ratings. The downgrades were as follows: class B, from AA-plus to A; class C, from AA to BBB; class D, from AA-minus to BB; class E, from A to CCC; class F, from A-minus to CC; class G, from BBB to CC; and class H, from BB-plus to CC. Classes A1 and A2 were also placed on Rating Watch Negative. The negative rating actions were attributed primarily to "the negative credit rating migration within the [asset-backed securities] portion of the underlying collateral." The ABS exposure consists of subprime residential MBS from 2005 to 2007. The synthetic CDO references a 2.0 billion euro diversified portfolio of primarily investment-grade corporate bonds in addition to the ABS, Fitch said.

Nine classes from four issues of Bear Stearns mortgage pass-through certificates have been downgraded by Fitch Ratings. Fitch also placed three classes on Rating Watch Negative and affirmed the ratings on 18 other classes from five Bear Stearns transactions. The rating agency can be found on the Web at http://www.fitchratings.com.

First American eAppraiseIT, Poway, Calif., has announced the introduction of a valuation tool that it says offers quick, low-cost, accurate values for credit decisions, loss mitigation, portfolio analysis, and quality assurance. The standard Data Assist report verifies a property's legal address and ownership and includes three closed-sale comparables from the subject property's market area, the company said. Data Assist with Listings offers the same information, plus three current listings that are similar to the subject property. "Many lenders are now looking for more alternatives [to automated valuation models]," said Michael Fosser, senior vice president of business development for eAppraiseIT. "Data Assist can provide a high level of confidence without adding significant cost or delay to these transactions." The company can be found online at http://www.eappraiseit.com.