Citing higher-than-expected delinquencies, Moody's Investors Service Inc. last week downgraded $980.1 million of residential mortgage-backed securities issued in 2005 by Bear Stearns Cos.
The securities were made up of adjustable-rate alternative-A mortgages. Such loans were typically given to prime-rated borrowers who did not document their assets and/or income.
Delinquencies on such loans originated from 2005 through 2007 exceed 25% for each year, Standard & Poor's Corp said.
All but one of the 13 tranches of the Bear Stearns deal downgraded by Moody's Friday were cut in February the other tranche was lowered in November. Two tranches were lowered into junk territory, and six others were already below investment-grade.
This month Moody's has downgraded more than $20 billion of securities backed by jumbo mortgages those with initial balances of at least $417,000. They have seen surging delinquency rates of late, but they remain far below those of other types of home loans.