Moody’s Gives Provisional Ratings to $166m GMACM Senior Note

Moody’s Investors Service assigned provisional ratings to a senior note issued by GMACM Mortgage Loan Trust Series 2010-1, a new residential mortgage-backed deal. The securitization is sponsored by General Motors Acceptance Corp. Mortgage (GMACM). According to a source close to the deal, GMACM Mortgage Loan Trust 2010-1 priced on Tuesday. Moody’s has assigned a provisional single-A 2 status to one senior note with an original stated value of $166.35m. This note is supported by a subordinate certificate with an original stated value of $55.45m, which Moody’s did not rate. The transaction is backed by 1,981 loans with a combined unpaid principal balance of $222m originated and serviced by GMAC. Loans insured by the Federal Housing Administration (FHA) make up 97% of the pool, with the remainder insured by the US Department of Veterans Affairs (VA). The ratings agency noted 25% of credit enhancement in the transaction “significantly exceeds” historical levels of cumulative losses on FHA/VA pools. Moody’s noted uncertainty remains regarding the insurance claims denial rate of FHA and VA loans. For example, US Department of Housing and Urban Development (HUD) may crack-down on FHA claims as delinquent volumes continue to rise. “While the level of claim denials by HUD following default has historically been low, the FHA has experienced an increase in losses on its portfolio over the past several years as its volume of insured loans has grown significantly,” Moody’s said in a statement. Additional concerns remain over the transaction. Moody’s said one-quarter of the loans studied as part of the third-party review were found to have “enhanced” risk of having possibly violated Truth in Lending Act at the time of origination. Most of the loans were bought out of Ginnie Mae securitizations and are highly delinquent. For example, 82% of the pool is 60 or more days delinquent. As HousingWire reported, the new deal arrives little more than a month since GMAC Financial Services announced it was re-branding under the name Ally Financial, amid myriad liquidity difficulties. Write to Diana Golobay.

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