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Fitch Rates Residential Accredit $206M 1996-QS7 Pass-Thrus 'AAA' - Fitch Financial Wire -

NEW YORK, Nov. 27 /PRNewswire/ -- Residential Accredit Loans, Inc.'s $206.2 million mortgage asset-backed pass-through certificates, series 1996- QS7, classes A and R are rated "AAA" by Fitch Investors Service. Additionally, the $9.1 million class M-1 certificates are rated "AA," the $5.1 million class M-2 "A" and the $3.6 million class M-3 "BBB."

Credit enhancement for classes A and R reflect subordination of the 4.00% class M-1, the 2.25% class M-2, the 1.60% class M-3 and the 1.65% unoffered class B. Classes M-1, M-2 and M-3 are rated "AA," "A" and "BBB," based on their respective subordination. Fitch believes the credit enhancement will be adequate to support mortgagor defaults, as well as bankruptcy, fraud and special hazard losses in limited amounts. The ratings also reflect the quality of the mortgage collateral, strength of the legal and financial structures and Residential Funding Corp.'s (RFC) servicing capabilities as master servicer.

The certificates are collateralized by two pools of conventional, fully amortizing, fixed-rate mortgage loans secured by first liens on one- to four- family residential properties. The Group I loans collateralize classes A-I-1 through A-I-12, while Group II loans collateralize class A-II.

The loans in Group I consist of 20- to 30-year fixed-rate mortgage loans with a principal $205,474,134. The pool demonstrates a weighted average original loan-to-value ratio (LTV) of 76.73%. Loans originated under a limited loan documentation program account for approximately 47.93% of the pool, cash- out refinance loans 19.94%, non-owner occupied loans 32.53% and jumbo loans 14.84% (balances greater than $300,000). Approximately 18.90% of the mortgaged properties are located in California.

The loans in Group II consist of 10- to 15-year fixed-rate mortgage loans with an original principal balance of $22,365,730. The pool demonstrates a weighted average original loan-to-value ratio (LTV) of 72.17%. Loans originated under a limited loan documentation program account for approximately 48.20% of the pool, cash-out refinance loans 29.90%, non-owner occupied loans 39.96% and jumbo loans 14.28%. Approximately 18.04% of the mortgaged properties are located in California.

The loans have been originated using program criteria and, in certain respects, underwriting standards that are less stringent than the program criteria and underwriting standards applied by other first mortgage loan purchase programs such as those administered by Fannie Mae, Freddie Mac or the company's affiliate, Residential Funding, for the purpose of collateralizing securities issued by Residential Funding Mortgage Securities I, Inc.

All of the Group I loans were purchased by RFMSI through RFC from unaffiliated sellers, except for 24.8% and 1.20%, which were purchased from RFMSI affiliates, HomeComing Financial Network and GMAC Mortgage Corp. of PA., respectively. In addition, 75.9% of the Group I loans are being subserviced by Capstead, Inc. Approximately 1.30% of the Group I loans were purchased from, and will be subserviced by, Merrill Lynch Credit Corp. (MLCC).

All of the Group II loans were purchased by RFMSI through RFC from unaffiliated sellers, except for 26.3% and 4.10%, which were purchased from RFMSI affiliates, HomeComing Financial Network and GMAC Mortgage Corp. of PA., respectively. In addition, 51.0% of the Group II loans are being subserviced by Capstead, Inc. Approximately 12.5% of the Group II loans were purchased from and will be subserviced by MLCC.

RFMSI, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, two real estate mortgage investment conduits will be made with respect to the trust fund.

SOURCE Fitch Investors Service
 -0- 11/27/96


/CONTACT: Joel B. Fleck, 212-908-0631, or Jeffrey D. Maggard, 212-908-0629, both of Fitch/

CO: Residential Accredit Loans, Inc. ST: IN: FIN SU: RTG

HD -- NYW044 -- 4692 11/27/96 12:00 EST http://www.prnewswire.com
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Date:Nov 27, 1996
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