Fitch: NY Predatory Law Won't Hurt RMBS

Although the New York City Local Law No. 36 does prohibit the City of New York from entering into any form of business with a financial institution or an affiliate of a financial institution where either entity is deemed a predatory lender as defined by the ordinance, the liability for violation of this ordinance does not flow through to assignees, Fitch Ratings has noted.Since there is no assignee liability risk for RMBS investors, Fitch will continue to rate bonds that include New York City-based mortgages as collateral, the company said. The ordinance was scheduled to go into effect on Feb. 18, 2003, but has been postponed due to a lawsuit filed by New York City Mayor Michael Bloomberg. Fitch's website address is http://www.fitchratings.com.