Fitch: RMBS Insulated From War Impact

The market for residential mortgage-backed securities is "well protected" from the potential economic impact of the war in Iraq, according to Fitch Ratings.The rating agency said the economy will probably suffer "slightly" from the war in the form of reduced travel and tourism, but that this would affect certain areas -- such as Orlando, Fla. -- more than others. "The geographic diversity and credit enhancement structured into RMBS deals should adequately address the economic impacts of the war and the possibility of terrorism," Fitch said. "However, the war will push some borrowers, already teetering on the edge of default as a result of the prewar economic malaise, over the edge." The rating agency said the effect of any terrorism on RMBS pools would likely be "very limited" as long as the pool is "reasonably" diverse geographically and borrowers do not depend on a few localized industries or military bases. Fitch can be found online at http://www.fitchratings.com.