MOODY'S RATES BANK OF AMERICA'S 2003-9 Alt-A MORTGAGE DEAL
Approximately $462 Million of Mortgage-Backed Securities Rated.
New York, February 12, 2004 -- Moody's Investors Service assigned the rating of Aaa to the publicly offered,
senior class certificates issued in the Banc of America Alternative Loan
Trust 2003-9 transaction (BOAALTA 2003-9). Moody's
also assigned the rating of Aa1 to the Class 1-CB-3 and
Class 3-A-2 certificates. Moody's said the transaction's
underlying loans were made to prime borrowers following alternative underwriting
criteria (Alt-A).
According to Carlos Maymi, a Moody's analyst, the rating
assignments for each group are based primarily on the credit enhancement
provided to the certificates through subordination. Given the initial
certificate amounts, this subordination provides 4.90%
in credit enhancement to the senior certificates collateralized by Groups
1 and 2, and 2.20% to the senior certificates backed
by Group 3. The sufficiency of this credit enhancement is a reflection
of the favorable characteristics of the mortgage loans supporting each
group and of Bank of America's proven ability as originator and servicer
of such loans.
The collateral supporting this transaction is divided in three groups.
The senior certificates collateralized by Group 1 and Group 2 receive
credit enhancement from a single set of subordinate certificate classes
(Class X-B-1 through Class X-B-6).
The Group 1 and Group 2 loans are 20 to 30-year, fixed rate
mortgages. Together, they have weighted average credit score
of 729 and weighted average LTV of 68%. Approximately 59%
of the mortgages are secured by investment properties. Similarly
to other prime loans originated by Bank of America, loans backed
by investor property and with LTV higher than 80% require that
the borrower obtain insurance on the mortgage loan. In addition,
a minimum credit score of 720 is required for the higher LTV, investor
loans.
Approximately 37% of the Group 1 and Group 2 loans were originated
under expanded criteria underwriting programs. These include loans
with no borrower income documentation or income verification (stated income
loans) and loans where no qualifying ratios were calculated to qualify
the borrower (no ratio loans). However, stated income loans
require employment verification, or verification of existing business,
if self-employed. No ratio loans require verification of
cash reserves if the borrower's credit score is below 720. Both
types of loans require a minimum credit score of 680.
Another 3% of the Group 1 and Group 2 loans in the transaction
are related to loans with LTV near 100%. The near 100%
LTV loans are offered for the purchase of primary residences with no money
down. Loan amounts may be up to 3% higher than the purchase
price of the property to include closing costs in the financing.
The LTV of loans in this portion of the pool ranges from 97% to
103%. However, Bank of America requires mortgage insurance
coverage of 35% of the loan amount for these loans. The
mortgage insurance required for these loans lowers the effective LTV closer
to 65%. The high LTV programs require minimum credit score
of 700. Additional 1% of Group 1 and Group 2 loans correspond
to a program of similar design. Namely, a low-down
payment program offered strictly for purchase or refinance of owner-occupied,
primary residences. The LTV for this portion is at 97% with
mortgage insurance coverage of 30% of the loan amount. This
program requires a minimum credit score of 640.
Finally, Group 3 includes 10 to 15-year, fixed-rate
mortgage loans. The senior certificates collateralized by Group
3 loans receive credit enhancement from a separate set of subordinate
certificate classes (Class 3-B-1 through Class 3-B-6).
This loan group has weighted average credit score of 735 and weighted
average LTV of 58%. Approximately 66% of the 15-year
mortgages are secured by investment properties. Similarly to other
prime loans originated by Bank of America, loans backed by investor
property and with LTV higher than 80% require that the borrower
obtain insurance on the mortgage loan. In addition, a minimum
credit score of 720 is required for the higher LTV, investor loans.
The remaining 34% of the 15-year loans were originated under
expanded criteria underwriting programs.
The complete rating actions are as follows:
Issuer: Banc of America Alternative Loan Trust 2003-9
Issue: Mortgage Pass-Through Certificates, Series 2003-9
$100,000,000 Fixed-Rate Class 1-CB-1
Certificates, rated Aaa
$134,687,000 Fixed-Rate Class 1-CB-2
Certificates, rated Aaa
$3,502,000 Fixed-Rate Class 1-CB-3
Certificates, rated Aa1
$18,256,000 Fixed-Rate Class 1-CB-4
Certificates, rated Aaa
$11,095,000 Fixed-Rate Class 1-CB-5
Certificates, rated Aaa
Interest Only, Class 1-CB-WIO Certificates,
rated Aaa
$23,716,000 Fixed Rate Class 2-NC-1 Certificates,
rated Aaa
$3,937,000 Fixed Rate Class 2-NC-2 Certificates,
rated Aaa
Interest Only, Class 2-NC-WIO Certificates,
rated Aaa
$154,905,000 Fixed Rate Class 3-A-1 Certificates,
rated Aaa
$2,789,000 Fixed Rate Class 3-A-2 Certificates,
rated Aa1
Interest Only, Class 3-A-WIO Certificates, rated
Aaa
$8,953,551 Principal Only Class PO Certificates,
rated Aaa
The mortgage loans underlying the transaction will be serviced by Bank
of America, N.A. (BANA). Headquartered in Charlotte,
North Carolina. BANA is a highly capable servicer of first mortgage
loans, primarily due to its state-of-the-art
technological capabilities and proven expertise in default management
and loss mitigation.
Additional research is available on http://www.moodys.com.
New York
Pramila Gupta
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Carlos A. Maymi
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653