Moody’s Investors Service said late Wednesday its decision to put the U.S. Government’s debt on review for possible downgrade could have implications for certain rated residential mortgage products.
While government and agency securitizations generally are not rated, rated re-securitizations of agency RMBS, HECMs securitized in the private market, and securitizations of reperforming FHA/VA collateral could be affected, the rating agency said. As a result of the U.S. government debt review, Moody’s also put on review for possible downgrade the ratings of about $6.4 billion in securities in the first category and roughly $5.5 billion combined in the latter two categories.
These types of securities “are all connected to the U.S. government either through a guarantee or insurance,” Moody’s senior vice president Debashish Chatterjee told National Mortgage News.
Moody’s review of the U.S. government’s debt includes consideration of issues that include ongoing discussions about raising the debt ceiling that will come to head in the next two weeks.
Moody’s, like many others in the investment community, wants a long-term solution to U.S. debt problem.
