Moody's Investors Service has downgraded $2.2 billion of securities backed by 'alt-A' mortgages issued in 2005 by Residential Funding Co. LLC, a unit of what is now Ally Financial. According to wire service reports, Moody's has downgraded several hundred billion dollars of MBS since the start of April as falling home prices, high joblessness and the slow economy led credit raters to revise loss expectations. In January Moody's placed $573 billion of alt-A MBS issued from 2005 through 2007 on review for possible downgrade after it revised its loss forecasts. Alt-A loans include mortgages made to borrowers that cannot document assets and/or income.
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