Metro Mortgage Classes Downgraded

Three classes of Metropolitan Mortgage Funding mortgage pass-through certificates, series 2000-A, have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-1, from Aa2 to A2; class M-2, from A2 to B3; and class B-1, from Baa2 to C. The ratings on three other classes in the deal have been affirmed. The class B-1 certificates have realized "significant losses" as a result of higher-than-expected pool losses, Moody's said. The rating agency said the certificates are backed by seller-financed loans (nearly 25% of the original mortgage balance) and loans with small average balances. "Seller-financed loans are often of weaker credit quality than lender-originated loans because borrowers tend to have difficulty obtaining financing from established lending institutions, and also because property sellers who finance these loans frequently lack the underwriting skills of conventional lending institutions," Moody's said. Smaller loans also weaken the quality of the collateral because they incur higher relative fixed costs upon liquidation, the rating agency said. Moody's can be found online at http://www.moodys.com.