S&P Releases New LEVELS, RMBS Modeling Software

Standard & Poor's announced the latest release of Standard & Poor's LEVELS, an innovative and unique rating and risk modeling software program that has been serving the U.S. residential mortgage securitization market for half a decade. The software employs a proprietary loan rating and risk evaluation model that is rapidly becoming the industry standard for mortgage originators, portfolio managers, residential mortgage-backed securities (RMBS) underwriters, and mortgage insurers.

LEVELS provides users with a standardized method of not only assessing the risk of a mortgage or pool of mortgages, but also of applying Standard & Poor's rating criteria in-house, thereby accelerating the securitization process. While risk modeling programs have been available for some time, LEVELS gives customers the advantages of being able to determine how their loans or portfolios will fit into Standard & Poor's various subordination rating tranches, and to benchmark the required loss reserves, as defined by Standard & Poor's.

"The company's deep pool of respected analytical talent gives us a lot of confidence that we can bring to market these types of quantitative software products that address the needs of our customers," said Joanne Rose, executive managing director of Structured Finance.

The latest release of LEVELS incorporates updated or new rating criteria for simultaneous seconds, hybrid adjustable-rate mortgage loans, and subprime adjustments. It also includes an updated version of Standard & Poor's Economic Index, which adjusts for projected real estate price fluctuations.

"The model is applicable to all steps in the residential mortgage chain," said Frank Raiter, managing director of Standard & Poor's Structured Finance Residential Mortgages group. "From front-end origination to risk-based pricing to estimated capital reserve requirements, our clients continue to find LEVELS a highly valuable tool."

LEVELS enables users to assess the credit risk of a residential mortgage loan or pool of loans right on their desktops. In addition, it provides a risk ranking based on Standard & Poor's criteria. More important, it allows users to structure securities, determine loss provisions, and view foreclosure frequency at the loan and pool levels.

The product can be applied to new or seasoned loans, giving managers and issuers a very handy and efficient way to manage and assess the risk of loans in their portfolios.

For more information on Standard & Poor's LEVELS, please visit www.levels.standardandpoors.com, send an e-mail to levels@standardandpoors.com, or call the Standard & Poor's LEVELS Help Desk at 1-888-SP-LEVEL.