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NEW YORK -- Moody's has refined its approach to analyzing securitizations of payment-option adjustable-rate mortgages.
The methodology revisions, stemming from the weaker housing and mortgage markets, also refine the rating agency's credit risk analysis of different option ARM products, Moody's said.
"The updated option ARM methodology is expected to increase our loss estimates by up to 20% and Aaa loss estimates by 10% to 40%," Moody's said.
The agency said the updated methodology refines its analysis of a loan's negative amortization potential by varying loss estimates based on the difference between a loan's fully indexed ...
Source: HighBeam Research, Moody's Refines Approach To Pay-Option ARM Product.(adjustable-rate...