Fitch Ratings has changed its criteria for recognizing prepayment penalty charges from home equity loans pledged to Net Interest Margin Securitizations.The adjustments reflect changes in the regulatory and statutory treatment of prepayment penalty charges and the impact those changes may have on the ability of servicers of subprime and home equity mortgages to enforce those prepayment penalties, Fitch said. The rating agency said its change "is likely to result in a reduction in the size of NIMS notes that are backed by transactions collateralized by mortgage loans with prepayment penalty charges lasting greater than 24 months. NIMS backed by loans with prepayment penalties that do not exceed 24-months will not be affected, Fitch said.
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