Fitch Cites 'Extensive Review' of Alt-A RMBS

Citing rapid deterioration in the U.S. housing market in the past several months, Fitch Ratings has announced an "extensive review" of alternative-A residential mortgage-backed securities originated from 2005 to 2007. The review involves 417 alt-A RMBS deals with an outstanding balance of $160 billion, all of which have been placed on Rating Watch Negative. The rating agency said the review will focus first on $10 billion of subordinate alt-A RMBS that face "substantial pressure" from rising mortgage defaults. The review is expected to be "substantively completed" by April 30. "Accelerating home price declines partly due to the recent dramatic contraction in the nonagency mortgage origination and securitization markets [have] been the primary catalyst of the alt-A performance downturn," said Glenn Costello, Fitch managing director and RMBS co-head.