Moody's Investors Service said last week it was reviewing option adjustable-rate mortgage residential mortgage-backed securities as part of a wider review of all RMBS transactions in light of the deteriorating housing market, rising delinquencies and worsening foreclosures. Higher-than-anticipated rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels prompted Moody's to downgrade more than 1,000 Alt-A classes. Most of the affected deals were backed by option ARMs.
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