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FITCH MORTGAGE-BACKED CRITERIA SURVEYS LOCAL ECONOMIES -- FITCH FINANCIAL WIRE --

 FITCH MORTGAGE-BACKED CRITERIA SURVEYS LOCAL ECONOMIES
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 22 /PRNewswire/ -- Fitch has refined its mortgage- backed securities criteria to more precisely reflect regional economic factors influencing future residential mortgage performance.
 The improved criteria will have its greatest effect on transactions rated "A" and below, where the current economic environment has a much greater impact. Transactions rated "AAA" and "AA" are based on an assessment of the worst case scenario, which was set in Fitch's benchmark Texas study. This method will also significantly improve Fitch's ability to analyze credit risk when assigning non-investment grade ratings to subordinate mortgage backed securities. Fitch rates 335 mortgage-backed transactions totalling $115 billion.
 Historically, home values and foreclosure expectations have been tied to an area's economic fluctuations. The improved criteria reflect Fitch's continued recognition of these regional variations in housing conditions, which are driven by differences in local economies. Where Fitch's previous ratings criteria divided the nation into six large regions, 43 distinct metropolitan, state, and multi-state regions are now recognized.
 Fitch, working with The WEFA Group, developed an econometric model, based on regional economic influences, which forecasts residential home prices and mortgage foreclosures for each of the 43 regions. The WEFA Group was formed in 1987 by the merger of Wharton Econometric Forecasting Associates with Chase Econometrics, another leading international econometric consulting firm. Wharton Econometrics was founded in 1963 by Lawrence R. Klein, winner of the 1980 Nobel Prize in Economics.
 The model is based on trends in the housing market since 1972. Key economic factors considered include the area's unemployment rate, employment growth, income growth, change in home prices, home sales, population growth, industry mix, housing stock, and housing affordability.
 The model features a three to five year forecast of foreclosure rates and home prices for each area and identifies recent trends in the housing market using quarterly updates of actual regional housing performance.
 -0- 10/22/92
 /CONTACT: Gregory Raab, 212-908-0536, Mary Sue Lundy, 212-908-0526, or Ken Rosenberg, 212-908-0609, all of Fitch/ CO: Fitch Investors Service ST: New York IN: FIN SU: ECO


TS -- NY122 -- 3760 10/22/92 15:11 EDT
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Date:Oct 22, 1992
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