Fitch Eyes $12.1B of 2nd-Lien RMBS

Fitch Ratings has placed all classes of 58 U.S. RMBS subprime transactions backed by pools of closed-end second-liens on Rating Watch Negative.The 58 transactions -- 35 of which were originated in 2005, 22 in 2006, and one this year -- have an aggregate outstanding balance of approximately $12.1 billion, the rating agency reported. The transactions constitute "the entirety of Fitch's rated portfolio" of closed-end second-lien residential mortgage-backed securities from those vintages. "Although the performance of individual transactions varies, the CES sector as a whole has significantly underperformed from original expectations," Fitch said. "Ongoing pressure from the combination of a declining housing market, weak loan underwriting standards, and interest rate resets on the associated adjustable-rate first liens has led to high delinquencies, rising losses, and a rapid deterioration of credit enhancement for these securities." Fitch can be found online at http://www.fitchratings.com.