No matter which way one tries to rationalize it, subprime mortgages originated in 2006 are piling up delinquencies faster than some of the fiercest housing bears might have imagined. In fact, Moody's Investors Service earlier this month put on watch for downgrade several tranches of a home equity deal closed just six months ago - in May.

The class M-10 and M-11 notes of SG Mortgage Securities Trust 2006-FRE1, rated Ba1' and Ba2', are both at risk of a downgrade. The deal is backed by a mix of subprime first lien adjustable and fixed rate mortgages originated by subprime lender Fremont Home Loans. Societe Generale and Deutsche Bank co-lead the deal; Wells Fargo is the servicer. Standard and Poor's and Fitch Ratings both rated the deal, but neither had issued an official review for downgrade as of press time.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.