Moody's Investors Service said June 15 that a host of negative rating actions it announced that day reflect the fact that second-lien subprime mortgage loans securitized in 2006 are defaulting at a "materially higher" rate than originally expected."Those loans were originated in an environment of aggressive underwriting and lack protection from home owner equity," the rating agency said. "The combination of this risk layering with slowing home price appreciation has caused significant loan performance deterioration and is the primary factor in these rating actions." The actions resulted in the downgrading of 131 securities (of which 111 remain on review for possible further downgrade), and 136 other classes were placed on review for possible downgrade, Moody's reported. The rating agency can be found online at http://www.moodys.com.

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