Moody's Investors Servicehas revised its overcollateralization floor for subprime mortgage transactions that include a mix of asset types, such as manufactured
housing loans, the company announced Tuesday. Going forward, the adequate overcollateralization floor will approximate the weighted average of 4% weighted by the MH concentration above 2%; and 0.50% weighted by the remaining collateral balance.
"For home equity deals where manufactured housing loans represent more than 2% of the cut-off date pool balance, Moody's will consider a higher overcollateralization floor to be credit-neutral, and such deals will receive a lower rating if traditional floors are used from this point forward," said Moody's analyst Navneet Agarwal.
