Fitch Ratings' RMBS group introduced its new RMBS credit enhancement model last week, which facilitates regression analysis on three different sectors: prime, Alt-A and subprime pools.

Through this new model, analysts are able to re-estimate the probability of default on new origination and performance data, look at "risk premium" rather than the coupon of the loan (assessing the relative cost and not the absolute cost of the mortgage), make a deeper analysis of FICO scores (specifically for subprime loans) and consider the timing pattern of defaults in terms of the sectors they occur in.

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