Three subordinate certificates from the GSMPS Mortgage Loan Trust 2005-LT1 have been downgraded by Moody's Investors Service.The downgrades were as follows: class B1, from Baa2 to Baa3; class B2, from B1 to Caa1; and class B3, from Caa3 to Ca. The transaction consists of nonperforming loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, virtually all of which were repurchased from Ginnie Mae pools. Moody's said the insurance covers a large percentage of any losses stemming from borrower defaults, but that "recent losses have significantly eroded credit protection."
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