Twelve classes of Greenpoint Credit Manufactured Housing Trust transactions have been downgraded by Fitch Ratings.The downgrades are as follows: in series 1999-5, classes M-1A and M-1B, from AA-plus to AA-minus, and class M-2, from A-plus to BBB; in series 2000-1, class A-3, from AAA to AA, classes A-4 and A-5, from AAA to A-plus, class M-1, from AA-minus to BBB-minus (and removed from Rating Watch Negative), and class M-2, from BB to CCC; and in series 2000-3, class IA from AAA to A-minus, class I M-1, from AA to BB-plus (and removed from Rating Watch Negative), class I M-2, from BBB to CCC, and class I B-1, from CCC to C. In addition, the ratings on six MH classes were affirmed. Fitch attributed the downgrades to poor collateral performance that caused losses to "significantly" exceed expectations. "Since exiting the MH [lending] business, Greenpoint has relied heavily on the wholesale channel and has recently seen recoveries of approximately 15%-20% for most transactions," Fitch said. "Like many manufactured housing servicers, Greenpoint relies heavily on modifications as a loss mitigation tool.... While Fitch believes modifications can help maintain cash flow on a low-recovery asset, Fitch expects the use of modifications to keep default rates higher than they would have been otherwise as the collateral seasons."

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