If market forces or over-leveraging wipe out most of the value of a transaction's subordinated classes
, the special servicer owning those classes may lose its incentive to maximize resolution of mortgages in default.
75% subordinated classes
1-M1 through 1-M3 and unoffered 1-B1 through 1-B3.
Standard & Poor's--Standard & Poor's Ratings Services today said that the 'AAA' rated senior and subordinated classes of Australian RMBS transactions with exposure to GE Mortgage Insurance Pty.
When reviewing the impact on 'AAA' rated senior and subordinated classes of Australian RMBS transactions, Standard & Poor's gave 75% credit to the mortgage insurance policies provided by GEMI, which is the level of credit given for a mortgage insurer in the 'AA' rating category.
AFCC) has executed a limited guarantee solely for series 1997-1 and 1997-2 subordinated classes
B-1 and B-2 ABS because of higher repossessions and net loss rates of the underlying pools of manufactured housing contracts.
This issue, their first for 1997, is unique in that it has been structured using subordinated classes
as credit enhancement, as opposed to a 100% surety wrap, the Company said.