In yet another round of subprime RMBS downgrades, Fitch Ratings said late yesterday that it had downgraded a total of nearly $700 million from four different Ameriquest RMBS deals. The majority of the downgrades hit a 2005 transaction, Argent Securities Inc. (ARSI) series 2005-W4, which saw $414.8 million from 8 classes downgraded. None of the downgrades were to AAA-rated tranches, although loss coverage ratios for some affirmed classes are now well-below the level usually required to maintain an AAA rating. (For the uninitiated, loss coverage ratios form the basis for most RMBS rating actions; they’re calculated by dividing expected losses by what is known as the “break loss,” which represents percentage of losses a particular class can withstand before investors start seeing a hit to principal). The 2005 ARSI deal contains loans originated by Argent Mortgage Co., the wholesale arm of now-defunct AMC Mortgage Services, which also was the parent of Ameriquest Mortgage Co. Argent was among the nation’s largest subprime wholesale mortgage operations during the housing boom, and as the mortgage market has imploded in recent months, brokered loans have consistently been singled out as particularly poor performers. In the Argent deal in question, 60+day delinquencies now stand at 31.09 percent; Fitch said it is expecting remaining losses to account for 19.08 percent of current balance. Outside of the 2005-W4 deal, Fitch also downgraded 13 classes from three additional Ameriquest-originated deals. One deal, ARSI 2004-W4 — another Argent loan pool — saw a AAA tranche downgraded to AA, although Fitch did not provide loss coverage information or deliquency data on the affected deal. Argent was assumed by Citigroup in the middle of 2007 as the subprime industry fell apart, along with AMC’s servicing platform; Ameriquest, the retail lending arm at AMC Mortgage Services, has since gone out of business. For more information, visit http://www.fitchratings.com.

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