You Got Some Junk in Your Trunk....I Mean Portfolio?

Published: July 11, 2007, 6:44 am

S&P may downgrade $12 bln of subprime securitiesRival rating agency Moody's cuts 399 mortgage-backed securitiesBy Alistair Barr, MarketWatchLast Update: 7:09 PM ET Jul 10, 2007SAN FRANCISCO (MarketWatch) -- Wall Street's two largest rating agencies signaled on Tuesday that problems in the subprime mortgage market aren't going away and will probably get worse as rising delinquencies weigh on U.S. house prices. Standard & Poor's said it may downgrade $12 billion of subprime residential mortgage-backed securities (RMBS), while rival Moody's Investors Service downgraded 399. S&P also said it's changing the way it evaluates those securities, partly because of unprecedented levels of misrepresentation and fraud, combined with potentially shoddy initial loan data. The new approach will be applied to new deals and could affect the ratings of other residential mortgage-backed securities, such as those issued this year, the agency noted. "This will impact everyone along the food chain," said

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