S&P Revises MH Loan Criteria

Standard & Poor's Ratings Services has announced a revision of the criteria it applies to manufactured housing mortgage loans in residential mortgage-backed securities.Effective for transactions closing on or after July 1, S&P is expanding the data requirements and devising loan-level loss coverage assumptions for manufactured housing loans. The following manufactured housing loans will no longer be allowed in S&P-rated RMBS collateral pools: repossessed units; loans with simultaneous seconds; second-lien loans; modified loans (including extensions, loan assumptions, and transfers of equity); land-in-lieu (no cash downpayment); low-side overrides (underwriting exceptions: loans that had been originally rejected); 60-plus-day delinquencies; and chattel paper. Manufactured housing loans should not constitute more than 15% of the total principal balance (plus any prefunding amounts) as of the cutoff date, the rating agency said. Issuers who want to include manufactured housing loans in RMBS transactions must provide various loan-level details for the MH collateral, including new versus used units; current delinquency status; and debt-to-income ratio. S&P can be found online at http://www.standardandpoors.com.