Standard & Poor's has announced that it will continue to rate structured finance deals containing mortgages from Oklahoma and Illinois that are governed by legislation that takes effect on Jan. 1.The rating agency said violations of Oklahoma House Bill 1574 (an amendment to the state's predatory lending law) and the Illinois High Risk Home Loan Act could result in liability for the originators of "subsection 10 mortgage loans" in Oklahoma and "high-risk home loans" in Illinois, and for purchasers and assignees as well. For purchasers and assignees, the liability is capped in Oklahoma but may exceed the unpaid principal balance of the loan, while in Illinois it is limited to the amount required to reduce or extinguish the borrower's liability plus recovery costs, S&P said. For deals that do not include subsection 10 or high-risk home loans, S&P will require the issuer to provide a representation and warranty to that effect. For other deals, the issuer must demonstrate that its compliance procedures can identify such loans and determine that they comply with the law. S&P can be found online at http://www.standardandpoors.com.

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