MOODY'S RATES SUNAMERICA MORTGAGE RESECURITIZATION Aaa
New York, 03-31-98 -- Moody's Investors Service has assigned ratings ranging from Aaa to Ba2 to the certificates issued in Bear Stearns Mortgage Securities Inc. Series 1998-2 MBS securitization. The certificates represent interests in 96 subordinate classes from seasoned MBS transactions owned by affiliates of SunAmerica.
Moody's senior vice president Jay Siegel explained that the rating actions were based primarily on the level of credit enhancement provided through (i) subordination in Series 1998-2 and (ii) subordination in the underlying MBS transactions. Siegel noted that the ratings are based also on the structure of the deal and on the evaluation of servicing of the underlying loans.
The subordinate classes backing the Series 1998-2 certificates represent direct or indirect interests in $27.6 billion of primarily 30-year fixed rate mortgages originated between 1990 and 1997. Most of the underlying subordinate classes represent interests in pools of "A" quality mortgages. Most of the underlying transactions should perform well; few are on track to lose more than 1% of original balance. The extensive diversity of originations across time periods and lenders reduces the downside volatility of performance. Collateral that is seasoned through a generally favorable real estate market is able to withstand minor macroeconomic stresses with minimal losses.
Although the payment structure calls for a pro rata allocation of principal, which reduces the credit support benefit from subordination, Series 1998-2 provides for the diversion of subordinate class cashflow to make accelerated payments to the senior class in the event collateral losses are allocated to Series 1998-2. This accelerated payment feature slightly reduces the negative impact of the pro rata payment structure.
The complete rating actions are as follows:
Issuer: Bear Stearns Mortgage Securities Inc.
$206.1 mil, 6.75%, Class A Pass-Through Certs, Ser 1998-2, rated Aaa
$61.4 mil, 6.75%, Class B Pass-Through Certs, Ser 1998-2, rated Aa2
$45.9 mil, 6.75%, Class C Pass-Through Certs, Ser 1998-2, rated Aa3
$74.6 mil, 6.75%, Class D Pass-Through Certs, Ser 1998-2, rated A2
$43.1 mil, 6.75%, Class E Pass-Through Certs, Ser 1998-2, rated A3
$53.4 mil, 6.75%, Class F Pass-Through Certs, Ser 1998-2, rated Baa2
$15.0 mil, 6.75%, Class G Pass-Through Certs, Ser 1998-2, rated Baa3
$16.5 mil, 6.75%, Class H Pass-Through Certs, Ser 1998-2, rated Ba2
$2.0 mil, principal only, Class PO Pass-Through Certs, Ser 1998-2, rated Ba2
Interest only, Class X Pass-Through Certs, Ser 1998-2, rated Aaa
Bear Stearns Mortgage Securities Inc. acquired the underlying certificates on the closing date from affiliates of SunAmerica Inc., and sold them to the Trust. Originators of the underlying loans include Prudential Home Mortgage (now Norwest), Citicorp Mortgage, Residential Funding Corporation, GE Capital Mortgage Services, and Countrywide Home Loans. Loan servicers include Glendale Federal Bank, FSB, Residential Funding Corporation, and GE Capital Mortgage Services.
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