Printer Friendly
The Free Library
22,738,802 articles and books

Fitch Downgrades 1 & Affirms 4 Classes From Merit Series 11.

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.
 takes the following rating actions on Merit Securities Corp. (Merit), series 11:

-- Classes 2A-3 and 3A-1 affirmed at 'AAA';

-- Class B-1 affirmed at 'AA';

-- Class B-2 affirmed at 'A';

-- Class B-3 downgraded to 'B' from 'BBB'.

The downgrade reflects the poor performance of the collateral pool and its potential impact on the above-referenced subordinate certificates. Downgrades affect approximately $20 million of certificates while the affirmations affect $104.6 million.

The downgrades reflect collateral losses higher than initial expectations. A key to the poor performance of the collateral is the high percentage of manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use.

In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected
 loans remaining in the pool. Manufactured housing loans typically experience a higher rate of default and higher loss severities on liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v.  loans. At origination, the collateral consisted of over 90% single family-detached units, 13% manufactured housing and 9% planned unit developments A Planned Unit Development, or PUD, is both a type of building development as well as a regulatory process. A PUD is a designed grouping of varied and compatible land uses, such as housing, recreation, commercial centers, and industrial parks, all within one contained . Currently, the collateral is comprised of over 77% manufactured housing, 18% single family detached units and less than 1% planned unit developments.

Credit Enhancement Credit Enhancement

A method whereby a company attempts to improve its debt or credit worthiness.

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
 in the form of over-collateralization (OC) declines at a rate of between 15-20 basis points (bps) a month.

This transaction's pool factor (the percentage of mortgage principal outstanding to the initial mortgage pool at closing) is just over 13%. The loans supporting Merit 11 were originated and continue to be serviced by Origen Financial (Origen), previously under the name Dynex Financial, Inc.

Further information is available on the Fitch Ratings web site at
COPYRIGHT 2005 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion




Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Feb 15, 2005
Previous Article:Winners of Product Excellence Awards Announced at LinuxWorld Conference & Expo in Boston; IDG World Expo and LinuxWorld Magazine reward product and...
Next Article:Department of Homeland Security Extends Submissions Deadline For Emerging Security Technology Forum.

Related Articles
Fitch Lowers 18 & Affirms 15 Classes from 8 UCFC Manufactured Housing Transactions.
Fitch Affirms 1 & Downgrades 4 RMBS Classes of Merit Series 13.
Fitch Lowers 3 & Affirms 2 RMBS Classes from Merit MH Series 13.
Fitch Affirms 21 & Downgrades 4 RMBS Ratings from 3 SASCO Securitizations.
Fitch Takes Rating Actions on $11.6B Of Conseco/Green Tree MH Transactions.
Fitch Affirms 33 & Lowers 12 RMBS Ratings from 8 SASCO Securitizations.
Fitch Takes Rating Actions on FFCA Secured Franchise Loan Trusts.
Fitch Lowers 12 & Affirms 9 RMBS Classes from 9 UCFC MH Issues.
Fitch Lowers 5 & Affirms 3 RMBS Classes From 2 Merit MH Issues.
Fitch Ratings Lowers 2 & Affirms 1 RMBS Class from MERIT 11.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters