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Rating Action:

Moody's takes action on $276.0 million of Alt-A RMBS issued by GMAC in 2005

19 Jul 2011

New York, July 19, 2011 -- Moody's Investors Service has upgraded the ratings of two tranches and confirmed the ratings of 26 tranches from seven RMBS transactions, backed by Alt-A loans, issued by GMAC.

RATINGS RATIONALE

The collateral backing these transactions consists primarily of first-lien, Alt-A residential mortgage loans. The actions are a result of the recent performance review of Alt-A pools and reflect Moody's updated loss expectations on Alt-A pools issued from 2005 to 2008.

The principal methodology used in these ratings is described in the Monitoring and Performance Review section in "Moody's Approach to Rating US Residential Mortgage-Backed Securities" published in December 2008. Other factors used in these ratings are described in "2005 -- 2008 US RMBS Surveillance Methodology" published in July 2011, which accounts for the updated performance and outlook. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

To assess the rating implications of the updated loss levels on Alt-A RMBS, each individual pool was run through a variety of scenarios in the Structured Finance Workstation® (SFW), the cash flow model developed by Moody's Wall Street Analytics. This individual pool level analysis incorporates performance variances across the different pools and the structural features of the transaction including priorities of payment distribution among the different tranches, average life of the tranches, current balances of the tranches and future cash flows under expected and stressed scenarios. The scenarios include ninety-six different combinations comprising of six loss levels, four loss timing curves and four prepayment curves. The volatility in losses experienced by a tranche due to extended foreclosure timelines by servicers is taken into consideration when assigning ratings.

In today's rating action, some tranches were upgraded. The upgrades are a result of improved performance and/or certain structural features. In certain transactions there are structural features whereby the tranches are receiving more principal payments than anticipated, supporting the upgrades.

The above mentioned approach is adjusted slightly when estimating losses on pools left with a small number of loans to account for the volatile nature of small pools. Even if a few loans in a small pool become delinquent, there could be a large increase in the overall pool delinquency level due to the concentration risk. To project losses on pools with fewer than 100 loans, Moody's first estimates a "baseline" average rate of new delinquencies for the pool that varies from 10% to 21% on average. The baseline rates are higher than the average rate of new delinquencies for larger pools for the respective vintages.

Once the baseline rate is set, further adjustments are made based on 1) the number of loans remaining in the pool and 2) the level of current delinquencies in the pool. The fewer the number of loans remaining in the pool, the higher the volatility in performance. Once the loan count in a pool falls below 75, the rate of delinquency is increased by 1% for every loan less than 75. For example, for a pool with 74 loans with a base rate of new delinquency of 10.00%, the adjusted rate of new delinquency would be 10.10%. in addition, if current delinquency levels in a small pool is low, future delinquencies are expected to reflect this trend. To account for that, the rate calculated above is multiplied by a factor ranging from 0.2 to 2.0 for current delinquencies ranging from less than 2.5% to greater than 80% respectively. Delinquencies for subsequent years and ultimate expected losses are projected using the approach described in the "2005 -- 2008 US RMBS Surveillance Methodology" publication.

The above methodology only applies to pools with at least 40 loans and a pool factor of greater than 5%. Moody's may withdraw its rating when the pool factor drops below 5% and the number of loans in the pool declines to 40 loans or lower unless specific structural features allow for a monitoring of the transaction (such as a credit enhancement floor).

Certain tranches in transactions serviced by GMAC Mortgage, LLC's (GMACM), were placed on review for possible downgrade in 2010 due to two concerns regarding the servicer's practices. Firstly, GMACM used shared custodial bank accounts for multiple RMBS transactions and secondly, GMACM had to suspend foreclosures in 25 states due to irregularities in its foreclosure processes. As GMACM is a subsidiary of C rated Residential Capital, LLC (RFC), in case of a default, losses could have been absorbed by the trusts. Since the tranches were placed on review, GMACM has eliminated the use of a common bank account across RMBS deals and set up individual accounts for each transaction. Also, GMACM has reviewed and revamped its foreclosure process, and has lifted its suspension of foreclosure sales and evictions on a case by case basis. Today's ratings actions are based on recent pool performance. Moody's is not keeping these bond under further review due to the two issues highlighted above as they have been resolved. However, the state attorneys general are engaged in ongoing discussions with several servicers regarding loan modifications and foreclosure procedures. The ultimate settlement of those discussions may entail fines, loan forgiveness, cash payments to borrowers or other features that could reduce future cash flows to RMBS investors. Moody's will continue to monitor the outcome and assess future credit implications on the ratings as the situation evolves.

The primary source of assumption uncertainty is the current macroeconomic environment, in which unemployment levels remain high, and weakness persists in the housing market. Moody's now projects house price index to reach a bottom in the first quarter of 2012, with a 2% remaining decline between the first quarter of 2011 and 2012, and unemployment rate to start declining by fourth quarter of 2011.

Complete rating actions are as follows:

Issuer: GMACM Mortgage Loan Trust 2005-AF1

Cl. A-3, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. IO, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Issuer: RALI Series 2005-QA1 Trust

Cl. A-1, Upgraded to Ba2 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. A-2, Upgraded to B3 (sf); previously on May 14, 2010 Downgraded to Caa3 (sf)

Issuer: RALI Series 2005-QA4 Trust

Cl. A-IV-1, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Issuer: RALI Series 2005-QS14 Trust

Cl. I-A-1, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A-P, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A-V, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Issuer: RALI Series 2005-QS3 Trust

Cl. I-A1-1, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A1-2, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A1-3, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A-P, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. I-A-V, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. II-A-1, Confirmed at B2 (sf); previously on Sep 27, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Cl. II-A-P, Confirmed at B2 (sf); previously on Sep 27, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Cl. II-A-V, Confirmed at B2 (sf); previously on Sep 27, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Issuer: RAMP Series 2005-SL1 Trust

Cl. A-I, Confirmed at Ba3 (sf); previously on Sep 27, 2010 Ba3 (sf) Placed Under Review for Possible Downgrade

Cl. A-IO, Confirmed at Ba3 (sf); previously on Sep 27, 2010 Ba3 (sf) Placed Under Review for Possible Downgrade

Cl. A-PO, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. A-II, Confirmed at B1 (sf); previously on Sep 27, 2010 B1 (sf) Placed Under Review for Possible Downgrade

Cl. A-IV, Confirmed at B2 (sf); previously on Sep 27, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Issuer: RAMP Series 2005-SL2 Trust

Cl. A-I, Confirmed at Ba3 (sf); previously on Sep 27, 2010 Ba3 (sf) Placed Under Review for Possible Downgrade

Cl. A-II, Confirmed at B1 (sf); previously on Sep 27, 2010 B1 (sf) Placed Under Review for Possible Downgrade

Cl. A-III, Confirmed at B2 (sf); previously on Sep 27, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Cl. A-IV, Confirmed at B1 (sf); previously on Sep 27, 2010 B1 (sf) Placed Under Review for Possible Downgrade

Cl. A-V, Confirmed at B3 (sf); previously on Sep 27, 2010 B3 (sf) Placed Under Review for Possible Downgrade

Cl. A-IO, Confirmed at Ba3 (sf); previously on Sep 27, 2010 Ba3 (sf) Placed Under Review for Possible Downgrade

Cl. A-PO, Confirmed at B1 (sf); previously on Sep 27, 2010 B1 (sf) Placed Under Review for Possible Downgrade

A list of these actions including CUSIP identifiers may be found at:

Excel: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF254453

A list of updated estimated pool losses, sensitivity analysis, and tranche recovery details is being posted on an ongoing basis for the duration of this review period and may be found at:

Excel: http://v3.moodys.com/page/viewresearchdoc.aspx?docid=PBS_SF198174

For more information please see www.moodys.com.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's received and took into account one or more third party assessments on the due diligence performed regarding the underlying assets or financial instruments in this transaction and the assessments had a neutral impact on the rating.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

New York
Soumya Vasudevan
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Deepika Kothari
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service, Inc.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's takes action on $276.0 million of Alt-A RMBS issued by GMAC in 2005
No Related Data.
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