Fitch RMBS Newsletter Highlights Deep Primary Mortgage Insurance.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 22, 2001

The use of deep primary mortgage insurance in subprime home equity asset-backed securitizations, as well as in traditional and alternative A quality mortgage- backed securitizations, has emerged as an economically efficient

supplement to structural enhancement mechanisms, according to the international rating agency Fitch. In an article appearing in the latest edition of the 'RMBS Mortgage Principles and Interest' residential mortgage-backed securitization (RMBS) newsletter, Fitch notes that the agency has seen an increased interest in using mortgage insurance as credit support, particularly over the last six months.

'Unlike the pool insurance policies popular in the last two decades, deep primary mortgage insurance is effectively a series of individual loan policies that provide loss coverage at higher, or deeper levels than that mandated by the government- sponsored enterprise,' said Kenneth Higgins, senior director, Fitch. 'This deeper mortgage insurance can substantially reduce the need for additional credit enhancements, such as excess spread, overcollateralization, or subordination.'

In addition to the mortgage insurance analysis, the latest edition of the 'RMBS Mortgage Principles and Interest' newsletter includes a year-end review and outlook for the RMBS market as a whole and for residential loan servicers in particular. The 'RMBS Mortgage Principles and Interest' newsletter is a quarterly publication dedicated to discussing current criteria, innovative deal structures, marketshare and industry trends in the residential mortgage, home equity, manufactured housing and mortgage servicer industries.

To view or download a copy of 'RMBS Mortgage Principles and Interest', log on to the Fitch web site (located at 'www.fitchratings.com'), choose 'RMBS' under the 'Sectors' heading and then select 'Newsletters'. For a full copy of the report, please contact Market Services at 1-800-853-4824.