Moody's Eyes Conti HEL Classes

Fifteen mezzanine and subordinate classes from 12 ContiMortgage Home Equity Loan Trust transactions from 1997 through 1999 have been placed under review for possible downgrade by Moody's Investors Service.The affected classes were as follows: series 1997-1, classes M-1 and M-2; series 1997-2, classes M-1F and M-2F; series 1997-3, class M-2F; series 1997-4, class B; series 1997-5, class B; series 1998-1, class B; series 1998-2, class B; series 1998-3, class B-I and B-II; series 1998-4, class B; series 1999-1, class B; series 1999-2, class B; and series 1999-3, class B. "For the 1997-1 through 1997-5 transactions, high losses have exhausted the credit enhancement provided by overcollateralization, resulting in writedowns on a number of subordinate classes," the rating agency said. "Additionally, recent increases in losses on pools backing the 1998 and 1999 ContiMortgage transactions are resulting in losses that exceed the amount of excess spread available, thus reducing the amount of credit enhancement provided by overcollateralization." Moody's noted that Fairbanks Capital Corp. acquired the servicing rights to all the ContiMortgage transactions in July 2000 from ContiFinancial, and that Fairbanks' servicer ratings were downgraded from Strong to Below Average in May 2003.