Fitch Ratings has placed the insurer financial strength ratings of three mortgage insurers on Rating Watch Negative, citing concerns regarding deterioration in several mortgage asset classes beyond the subprime mortgage sector.
“While initially the current situation was impacted mainly by the subprime mortgage sector, deterioration has begun to spill over to other mortgage asset classes, such as adjustable-rate, negative amortizing, reduced documentation (Alt-A), and second-lien mortgages,” Fitch said in a statement.
As a result, Fitch has placed on Rating Watch Negative the “double-A” IFS ratings of Mortgage Guaranty Insurance Corp. (MGIC), the “double-A-minus” IFS ratings of Radian Guaranty Inc., and the “double-A” IFS ratings of PMI Mortgage.
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