Last week both Fitch Ratings and Standard & Poor's Corp. downgraded a number of Conseco Finance home equity and manufactured housing transactions, following the default on certain unsecured debt obligations by Conseco. Fitch also cut the ratings of the previously triple-A rated senior tranches of the 1999-4 through 2001-1 M.H. transactions to double-A.

In a report, Lehman Brothers broke down the three main assumptions that Fitch made around future performance. Lehman said that Fitch ramped up loss severities to 90% from 65% over the next several years and then reduced it back down to 65%.

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