The securitization of nonperforming and reperforming government-guaranteed loans is a fast-growing segment of the residential mortgage-backed securities market, according to Moody's Investors Service.Moody's said $20 billion of nonperforming and reperforming loans backed by the Federal Housing Administration and the Department of Veterans Affairs were securitized in 2002, up from $7 billion in 2001. "The reperforming and nonperforming loans typically have been repurchased out of Ginnie Mae pools," said Warren Kornfeld, a Moody's analyst. He said the credit quality of the loans is "comparable to that of weaker-than-average subprime" MBS transactions. Moody's can be found online at http://www.moodys.com.
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