The ratings of Doral Financial Corp., a San Juan, Puerto Rico-based mortgage lender, and of Doral Bank have been downgraded by Fitch Ratings.Doral's long-term issuer and senior unsecured debt ratings were downgraded from C/D to D. Doral Bank's long-term nondeposit obligations were downgraded from BBB-minus to BB, and its short-term nondeposit obligations were downgraded from F3 to B. The ratings remain on Rating Watch Negative. The actions followed an announcement that the Securities and Exchange Commission has ordered an investigation into Doral and a further delay in its restated financials that relates chiefly to information on the company's mortgage loan sales to local financial institutions, Fitch said. "With Doral being a major seller of mortgages in the local market, the amount of mortgages that could be required to be brought back on balance sheet would pressure capital ratios and require funding programs to be broadened in the face of increased uncertainty regarding Doral's future financial performance," the rating agency said. "The rating action takes into consideration the possibility of deterioration in capital ratios, but expects the company to remain well capitalized relative to quantitative regulatory standards." Fitch can be found online at http://www.fitchratings.com.
