Moody's Investors Service announced it downgraded 88 classes and placed on review for possible downgrade 18 classes from 18 deals issued in early 2007 and backed by closed-end second lien mortgage loans. The loans have been performing "extremely poor" with a high rate of early default, resembling the performance of piggyback loans securitized in 2006 due to aggressive underwriting guidelines combined with prolonged home price decline. Fitch Ratings announced it downgraded $4.4 billion and placed on Rating Watch Negative $3.8 billion in classes of subprime residential mortgage-backed securities issued in 2007. The negative actions were based on updated subprime loss forecasting assumptions, which better capture deteriorating performance of 2007, 2006 and late 2005 pools.
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