Fitch to Keep Criteria on NJ Home Loans

Fitch Ratings has announced that it is maintaining its criteria on home loans governed by New Jersey's predatory-lending laws following the amendment to New Jersey's Homeownership Security Act of 2002.Fitch said it believes the elimination of "covered home loans" and "flipping" should eliminate some of the uncertainties for mortgage lenders and will benefit the New Jersey mortgage market, as more lenders may now begin, or resume, making mortgage loans in New Jersey. However, Fitch added that the amendment does not change or further clarify the assignee liability or safe-harbor issues. Thus, Fitch's policies and procedures in regard to "high-cost home loans" in New Jersey are not affected by passage of the amendment. In order to rate residential mortgage-backed securities transactions, which contain any loans originated in New Jersey after the original act's effective date of Nov. 28, 2003, Fitch will continue its policy of reviewing the results of an independent analysis of loans by an acceptable, unaffiliated third party that states that due diligence was conducted on the New Jersey loans.