Moody's Investors Service said it took ratings action on $7.1 billion of payment option ARM MBS issued by GreenPoint Mortgage Funding Trust from 2005 to 2007.

Moody's downgraded the ratings of 94 tranches, but confirmed ratings on 13.

It said the collateral "consists primarily of first-lien, adjustable-rate, negative amortization, Alt-A residential mortgage loans." (POA mortgages also fall into the alt-A category.)

Moody's said the downgrades come because of "rapidly deteriorating performance of option arm pools in conjunction with macroeconomic conditions that remain under duress." Some of the tranches were downgraded to B3 and Caa3.

GreenPoint Mortgage was part of GreenPoint Bancorp which was bought by North Fork Bank in 2005. A year later Capital One, the credit card giant, bought North Fork. In the summer of 2007 Capital One closed GreenPoint Mortgage, a top ranked alt-A lender.

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