Moody's Investors Service on Friday placed 3,000 pre-2005 Jumbo prime RMBS with an outstanding balance of $43.4 billion on review for possible downgrade.

While the loan pools backing these securities have paid off to a significant degree, there has been continued performance deterioration due to declining home values, according to Moody's.

The rating agency's Economy.com unit expects declines to continue another 5% to 7% this year, adding up to total declines of about 17% to 20% from mid-2004 levels and 5% to 10% from mid-2003 levels.

Moody's is working on updating its loss projections methodology for seasoned RMBS.

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