MONTERREY, Mexico--(BUSINESS WIRE)--Fitch Ratings reviewed Patrimonio's and Tertius' (secondary/substitute servicers) Loan Modification Proposals (LMP) to be applied on certain securitized mortgage loans. Such loans are backing the following rated RMBS: BRHSCCB 05U, MXMACCB 05U, PATRICB 07-2, MXMACCB 05-2U, BRHCCB 08-4U, MXMACCB 06U, CREYCCB 06U, BRHCCB 08-5U, BONHITO F5539, MXMACFW 07U, MXMACFW 07-3U, Su Casita Trust Class A, Su Casita Trust Class B, MXMACFW 07-2U, MXMACFW 07-4U, MXMACFW 07-5U, MXMACFW 07-6U, MXMACFW 06U, MXMACFW 06-2U and BRHCCB 07-3U. In Fitch's opinion, such LMP would not, in and of themselves, and as of this date cause a downgrade or withdrawal on the current ratings of the above mentioned RMBS. However, Fitch states that further rating actions (upgrades, downgrades or withdrawals) cannot be ruled out after applying these LMP due to the credit performance of each transaction.
The LMP are: 'Apoyo con Quita', 'Programa Finiquito / Venta de Derechos Litigiosos', 'Reduccion Permanente de Mensualidad con Quita' and 'Dacion en Pago con Incentivo Economico'. Fitch conducted a net present value analysis in order to estimate expected cash-flows derived from a simulation of each product characteristics and also from average loan portfolios' frequency of foreclosure according to Fitch's methodology 'RMBS Latin America Addendum - Mexico' and last available data tape for a loan by loan basis. Fitch used this approach on RMBS rated higher than 'B-(mex)'. In Fitch's opinion, rated notes below that level exhibit some exposure to default; hence, they already capture their exposure to the application of loan modification products.
Fitch's opinion exclusively refers to credit-related events and is supported in the above mentioned cash-flows simulations, diverse assumptions and information provided by the transactions' parties. Therefore, in some occasions the recovery rate derived from the net present value analysis could be inferior than the one implied by Fitch's traditional loss given default analysis. According to the information received, Fitch acknowledges the current secondary servicers' collection policies already include these loan modification products, they will apply them under a recovery maximization principle and will be offered individually and not as part of a massive program.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' (May 24, 2013);
--'Rating Criteria for RMBS in Latin America' (Feb. 15, 2013);
--'RMBS Latin America Criteria Addendum - Mexico' (July 31, 2013).
Applicable Criteria and Related Research:
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661
Rating Criteria for RMBS in Latin America
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=701131
RMBS Latin America Criteria Addendum - Mexico
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=714999
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