Several credit concerns have resulted in Moody’s Investors Service’s decision not to award its highest ratings to resecuritizations of U.S. residential mortgage-backed securities. Those concerns, said Moody’s, include “volatility of potential losses in the current environment, a lack of strong protections against bankruptcy risk, ambiguities in the legal documents and uncertainties resulting from foreclosure irregularities.” Moody’s further said the added risk of bankruptcy in some RMBS resecuritizations is “inconsistent with its highest ratings.”
