Fitch Affirms 1 & Lowers 8 Classes from Long Beach Mortgage Loan Trust, Series 2002-2.
NEW YORK -- Fitch Ratings has taken rating actions on the following Long Beach Mortgage Loan Trust issue:
Series 2002-2 Group 1
-- Class I-A affirmed at 'AAA';
-- Class I-M2 downgraded to 'BBB' from 'A';
-- Class I-M3 downgraded to 'B' from 'BBB-';
-- Class I-M4A downgraded to 'CCC' from 'B';
-- Class I-M4B downgraded to 'CCC' from 'B'.
Series 2002-2 Group 2
-- Class II-M2 downgraded to 'BBB' from 'A';
-- Class II-M3 downgraded to 'B' from 'BBB-';
-- Class II-M4A downgraded to 'CCC' from 'B';
-- Class II-M4B downgraded to 'CCC' from 'B'.
All of the mortgage loans in the series 2002-2 transaction were either originated or acquired by Long Beach Mortgage Company. Group 1 consists of first lien, adjustable-rate and fixed-rate mortgage loans with principal balances that conform to Fannie Mae loan limits, and Group 2 consists of first and second lien, adjustable-rate and fixed-rate mortgage loans with principal balances that generally do not conform to Fannie Mae loan limits. As of the December 2005 distribution date, series 2002-2 transaction is 42 months seasoned, and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) for Group 1 and Group 2 are approximately 16% and 10%, respectively. Long Beach Mortgage Company is the master servicer for this transaction, and Washington Mutual Bank, rated 'RPS2' for subprime products by Fitch, is the subservicer for all of the mortgage loans.
Classes M2, M3, M4A and M4B represent interests in both loan groups, and solely for purposes of determining distributions of principal and interest and the allocation of losses realized on mortgage loans, each class consists of two components: I-M2 and II-M2; I-M3 and II-M3; I-M4A and II-M4A; and I-M4B and II-M4B. The credit enhancement (CE) for a component class may differ between the loan groups. However, a default of a component class would result in a default of the entire class and therefore the ratings reflect the credit risk to the weaker of the two components.
The affirmation reflects a satisfactory relationship between CE and future loss expectations and affects approximately $22.5 million of outstanding certificates. Additionally, the affirmation on class I-A reflects a guaranty provided by the Federal National Mortgage Association ('Fannie Mae'), whose financial strength is rated 'AAA' by Fitch.
