by Calculated Risk on 2/15/2007 04:05:00 PM

From Bloomberg: Subprime Mortgage Bondholders to Get Earlier Warnings From S&P

Standard & Poor's said it will no longer wait for homes to be foreclosed and sold for losses before alerting investors in mortgage-backed securities that it expects to lower ratings on their bonds.

The ratings company will now consider issuing downgrade warnings based on the amount of loans that are delinquent, in foreclosure proceedings or already backed by seized property, Robert B. Pollsen, an analyst at the firm, said on a conference
call today.
...
``It is a watershed event'' because it means S&P is now actively considering downgrading bonds within their first year and has a new program to address high levels of early delinquencies, said Daniel Nigro, an asset-backed securities portfolio manager in New York at Dynamic Credit Partners ...

And it's not just subprime:

One of the bonds S&P warned about yesterday was backed by Alt A -- often called ``near prime'' -- mortgages, the firm's first warning about that type of security sold last year.
...
``In terms of performance, I'd say there are equal concerns'' about Alt A loans and subprime loans at S&P based on early delinquencies, [Ernestine Warner, an S&P analyst] said. The Alt A bond that S&P warned about was issued by Calabassas, California-based Countrywide Financial Corp., the country's top mortgage lender.

S&P also expressed concerns about home equity loans.