UCFC MH Classes Downgraded

Five classes of United Companies Financial Corp. manufactured housing securities have been downgraded by Fitch Ratings.The downgrades were as follows: series 1997-4, class A-4, from BBB-plus to BBB-minus; series 1998-1, class A-3, from A-minus to BBB-minus; series 1998-2, class A-3, from A-minus to BBB-plus, and class A-4, from B-plus to B; and series 1998-3, class A-1, from B-plus to B. Fitch also affirmed the ratings on six classes in five UCFC manufactured housing deals, raised the distressed recovery ratings on three classes, and lowered them on two. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The loans were originated by United Companies Funding Inc., a wholly owned manufactured housing lending subsidiary of UCFC. In 1998, UCFI announced plans to close down its manufactured housing business, and UCFC filed for Chapter 11 bankruptcy protection the following year. The MH portfolio, servicing rights, and residual interests were later acquired by EMC, a wholly owned subsidiary of Bear Stearns Cos., Fitch reported.