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FITCH RELEASES NEW SUB- AND NONPERFORMING MORTGAGE CRITERIA -- FITCH FINANCIAL WIRE --

 NEW YORK, Feb. 24 /PRNewswire/ -- Securities backed by sub- and nonperforming first mortgages are gaining popularity among investors. However, methods for analyzing these securities are different from those used to evaluate pools of performing loans. Fitch's criteria for rating these securities is explained in "Mortgage Criteria for Subperforming and Nonperforming Loans," a report being published Feb. 25. In addition to outlining Fitch's criteria, the new report also highlights various structures and includes a methodology for analyzing the timing of cash flows as well as a summary of Fitch's servicer review procedures.
 The key difference between Fitch's analysis of performing pools and nonperforming pools is the time horizon that the loans are expected to be outstanding. Subperforming mortgage loans are anticipated to cure or pay off while nonperforming mortgage loans are generally liquidated -- all in the next two to three years. In contrast, the evaluation of a performing pool of mortgage loans must incorporate a 15- to 30-year time period.
 As a result, the market value decline assumptions for performing pools must reflect the maximum market value decline for an individual region. This market value decline primarily reflects the economic diversity of the region. In contrast, market value decline expectations for sub- and nonperforming mortgage loans depend more heavily on recent economic performance while still assessing projected economic activity in individual regions.
 Fitch requires a recent estimate of property value for each mortgage loan to reflect the current market activity. Future market value assessments for each rating category are then developed based on an econometric model developed in conjunction with the WEFA Group, which forecasts residential home price movements for 43 different regions around the nation.
 -0- 2/24/93
 /NOTE TO EDITORS: For a copy of Fitch's complete report, contact Market Services at 212-908-0500 or 1-800-75-FITCH/
 /CONTACT: Mary Sue Lundy of Fitch, 212-908-0526/


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GK -- NY045 -- 9950 02/24/93 13:25 EST
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Date:Feb 24, 1993
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