Moody's Investors Service on Thursday downgraded another $12.18 billion of residential mortgage-backed securities backed by subprime loans.

The cuts are a result of continued deterioration in the performance of the loans that back the MBS in question because of the continuing housing downturn and high unemployment as well as Moody's updated loss expectations on subprime pools issued from 2005 to 2007.

The downgraded ratings include $7 billion issued by Carrington Home Equity Loan Trust, $5 billion from Fremont Home Loan Trust and $180 million issued by Meritage Mortgage Loan Trust.

This month Moody's said it may lower $50 billion of subprime MBS, which constitutes more than 80% of all such MBS issued before 2005. Two weeks ago, $42.2 billion was cut as credit raters continue to raise expectations for losses amid still-rising delinquencies.

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