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18 Nov 2003
MOODY'S ASSIGNS Aaa RATING TO EQUITY ONE MORTGAGE PASS-THROUGH TRUST 2003-4
Approximately $1.0 Billion of Asset-Backed Securities Rated.
New York, November 18, 2003 -- Moody's Investors Service has assigned a credit rating of Aaa to the senior
certificates issued in the Equity One Mortgage Pass-Through Trust
2003-4, a securitization of subprime fixed-rate and
adjustable-rate residential mortgage loans. In addition,
Moody's assigned ratings ranging from Aa2 to Baa3 to the subordinate classes
According to Moody's, the ratings of the certificates are based
primarily on the credit enhancement available from subordination,
overcollateralization, excess spread and loan-level mortgage
insurance on some of the loans.
The loan pool underlying the transaction consists of subprime fixed-
(FRM) and adjustable-rate mortgage (ARM) loans originated or purchased
by Equity One, Inc. The FRM loans make up 65% of the
aggregate pool and the ARM loans account for the other 35%.
The loans have weaker than average credit quality because of their high
loan-to-value (LTV) ratios. About 69% of the
pool have LTV ratio greater than 80%. The pool's average
LTV of 86% is about 6% higher than what is typical for the
The risk associated with the weaker distribution of LTV ratios is partially
offset by better borrower quality. The loans' average FICO score
of 638 is about 10-15 points higher than that of a typical subprime
pool. The distribution of the borrowers' credit scores is also
favorable. Less than 5% of the pool has FICO less than 550
while about 78% has FICO greater than 600.
The deal's structure relies on subordination, overcollateralization,
excess spread and loan-level mortgage insurance for credit enhancement.
Mortgage Guaranty Insurance Corporation (MGIC), whose insurance
financial strength is rated Aa2, provides primary mortgage insurance
for certain loans with LTVs greater than 80%. MGIC insurance
reduces the risk associated with these loans, which amount to about
43% of the pool, by reducing severity of loss should they
default. However, because of the MGIC's insurance's share
in the total credit enhancement, the ratings of the certificates
are linked to MGIC's own insurance financial strength rating (currently
Aa2), and may be susceptible to change based on a change in MGIC's
The complete rating action follows.
Issuer: Equity One Mortgage Pass-Through Trust 2003-4
Securities: Mortgage Pass-Through Certificates, Series
$229,470,000 Adjustable Rate Class AF-1 rated
$62,500,000 2.839% Class AF-2
$93,440,000 3.531% Class AF-3
$37,200,000 4.698% Class AF-4
$16,407,000 5.703% Class AF-5
$48,780,000 4.833% Class AF-6
$300,000,000 Adjustable Rate Class AV-1 rated
$53,981,000 Adjustable Rate Class AV-2 rated
$65,138,000 5.369% Class M-1 rated
$47,601,000 6.031% Class M-2 rated
$15,032,000 6.279% Class M-3 rated
$12,526,000 6.400% Class M-4 rated
$10,021,000 Adjustable Rate Class B-1 rated
$10,020,000 Adjustable Rate Class B-2 rated
Equity One, Inc., the primary servicer of the loans
with headquarters in Marlton, New Jersey is a wholly owned subsidiary
of Popular North America, Inc. As of August 31, 2003,
Equity One and its subsidiaries were servicing approximately $5.7
billion of mortgage loans.
Additional research will be available on www.moodys.com.
Structured Finance Group
Moody's Investors Service
Dana S. Skelton
Asst Vice President - Analyst
Structured Finance Group
Moody's Investors Service
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
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