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RESOLUTION TRUST CORP. 1991-9 CLASS A&B PASS-THROUGHS PLACED ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 16 /PRNewswire/ -- Resolution Trust Corp.'s (RTC), series 1991-9 initial $196.3 million "AAA" class A and $15.3 million "AA" class B mortgage pass-through certificates are placed on FitchAlert with negative implications. For the next three months, Fitch will monitor the pool's performance, the RTC's repurchase obligations, and Ryland's servicing, all relative to the available credit enhancement. The primary credit and rating factor will be the extent to which the RTC's repurchase obligations cover losses and, thereby, preserve credit enhancement.
 This action is due to concern that the original appraisals were high, leading to larger-than-anticipated losses. In addition, delinquencies continue to rise due primarily to the continued softening of the California economy as well as two servicing transfers. Offsetting anticipated losses, 42 percent of the 602 delinquent loans as of the Aug. 25, 1993 distribution date (including foreclosures and REO) may be required to be repurchased by the RTC in the event of any losses. These borrowers were delinquent on their taxes at the time of issuance, which is a breach of representations and warranties.
 All the loans in the pool were originated or acquired by Guardian Savings and Loan Association under an equity-based lending program. Higher default levels are anticipated for lenders to "B" and "C" quality borrowers. As of the August distribution date, however, delinquencies totaled 11.44 percent, 4.55 percent, and 35.52 percent in the 30-, 60-, and 90-day plus categories, respectively, as a percent of current balance. This is significantly higher than original estimates. In addition, continued deterioration in the California market, where 100 percent of the pool is located, and Southern California in particular (73.5 percent of the pool) has complicated Ryland Mortgage Co.'s collection efforts.
 Fitch recently conducted an on-site visit to Ryland to review collection efforts, as well as a sample of the 123 REO files. When original appraisals were compared to the available current appraisals for 76 of the 123 REO properties, Fitch found the differences averaged 30 percent-35 percent, significantly higher than the average decline in median home prices for California of 6.2 percent from third-quarter 1989 through December 1992. This has led to much lower recovery rates than initially anticipated on a pool thought to have an original weighted LTV of 66.4 percent.
 Currently, the "AAA" enhancement is 26.64 percent (compared to the original credit enhancement of 15.5 percent), representing 9.45 percent subordination, 10.14 percent reserve fund, and 7.05 percent over collateralization based on the current pool balance. The "AA" enhancement is 17.19 percent (compared to the original credit enhancement of 8.25 percent), representing 10.14 percent reserve fund and 7.05 percent over collateralization based on the current pool balance.
 In its review of cumulative losses through the July distribution date, Fitch noted that the servicer was only advancing principal and interest (P&I) through foreclosure sale, but was using funds from the reserve fund to advance P&I through REO liquidation. As of the August 1993 distribution date, Ryland has agreed to advance corporate funds.
 Fitch will publish a special report on RTC 1991-9 Monday, Sept. 20, 1993.
 -0- 9/16/93
 /CONTACT: Jill M. Guido, 212-908-0682, or Kevin P. Duignan, 212-908-0630, both of Fitch/


CO: Resolution Trust Corp. ST: IN: SU: RTG

TS -- NY025 -- 2634 09/16/93 11:04 EDT
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Publication:PR Newswire
Date:Sep 16, 1993
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