Just 10% of the re-REMIC deals Fitch has been presented with get rated in the wake of a number of restrictions it has put in place over the last year and ratings in the category are less volatile as a result of the move.

As a result of these restrictions on rating resecuritizations of residential mortgage-backed securities in REMIC (real estate mortgage investment conduit) form, Fitch said it has been able to improve its rating stability but that there still is some downgrade risk in certain ratings in this category, particularly those it rated before tightening its criteria.

So far the company said re-REMIC classes originally receiving its top rating of AAA in 2008 have since been downgraded below the speculative grade rating of B are limited to 20 ratings related to deals that deteriorated sharply in the wake of the Lehman bankruptcy and increased unemployment in late 2008, particularly in California and Florida.

Of more than 1,800 re-REMIC classes rated AAA by Fitch since the beginning of 2008, more than 95% retain their original rating or were paid in full. Among re-REMIC limitations Fitch put in place over the past year due to current rating volatility concerns are prohibitions against rating re-REMICs backed by subprime or alt-A collateral of subordinate classes.

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