Fitch Affirms $93.2MM & Downgrades $14.5MM from Meritage Mortgage Corp. 2004-2.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has taken the following rating actions on Meritage Mortgage Corporation asset-backed certificates as follows: Series 2004-2 --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'AA+'; --Class M-3 affirmed at 'AA'; --Class M-4 affirmed at 'AA-'; --Class M-5 affirmed at 'A+'; --Class M-6 affirmed at 'A', and removed from Rating Watch Negative; --Class M-7 downgraded to 'BB+' from 'A-', and removed from Rating Watch Negative; --Class M-8 downgraded to 'B' from 'BB+'; --Class M-9 downgraded to 'C/DR2' from 'BB'; --Class M-10 downgraded to 'C/DR3' from 'B+'. The affirmations reflect an adequate relationship between credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing (CE) and expected loss and affect approximately $93.2 million in outstanding certificates. The downgrades affect approximately $14.5 million of the outstanding certificates. The negative rating actions reflect continued deterioration in the relationship between CE and future loss expectations. The transaction is experiencing monthly losses that exceed the available excess spread (XS). As of the September 2007 distribution, the transaction has exhausted its overcollateralization (OC) and the most subordinate bond has begun to experience writedowns due to losses. Non-performing loans (i.e. loans in 60+ delinquency, including foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. , bankruptcy, and REO reo Noun NZ a language [Maori] [real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most ]) comprise 38.15% of the pool. The pool is seasoned 36 months and has a pool factor (current principal balance as a percentage of original balance) of 11%. The mortgage pool consists of conventional, first and second lien A Second lien financing is a form of financing secured on a second ranking basis by (more or less) the same security, which secures the first ranking financing. The first lien lenders and the second lien lenders agree that, in the event of a security enforcement or bankruptcy, the , adjustable- and fixed-rate residential mortgages. The mortgage loans were originated by Meritage Mortgage Corp. The loans are serviced by Saxon Mortgage Services, Inc., rated 'RPS2+' by Fitch. Fitch will closely monitor the relationship between XS and monthly losses for those transactions in the upcoming months. If the losses continue to exceed XS, the ratings will be reassessed. Further information regarding current delinquency, loss and credit enhancement statistics is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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