Metro Mortgage MBS Classes Downgraded

Five classes from three Metropolitan Mortgage & Securities Co. Inc. securitizations have been downgraded by Fitch Ratings.The downgrades were as follows: series 1998-B, class B-1, from B-minus to CCC; series 2000-A, class M-1, from AA to A, and class M-2, from CCC to C; and series 2000-B, class M-2, from A to BBB, and class B-1, from CCC to C. In addition, Fitch upgraded 15 classes and affirmed the ratings on 15 others from eight Metro Mortgage issues. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations. The transactions "have failed their cumulative loss triggers, which has prevented the trusts from paying principal to the subordinate bonds," the rating agency said. The collateral for the deals consists chiefly of fixed- and adjustable-rate mortgage loans secured by first liens on residential properties or commercial real estate. The majority of the mortgage loans were originated or acquired by Metropolitan Mortgage, which filed for Chapter 11 bankruptcy protection in February 2004.