OREANDA-NEWS. Fitch Ratings has reviewed Metrofinanciera, S.A.P.I. de C.V., SOFOM, E.R.'s (Metro) residential mortgage backed securities (RMBS). A full list of rating actions follows at the end of this ratings action commentary.

KEY RATING DRIVERS

MTROCB 07U

The downgrade reflects the growing exposure of rated notes to special collections activities and real estate-owned (REO) management. Credit enhancement (CE) metrics continue deteriorating as overcollateralization (OC) levels decreased to -81.9% from -71.0% during the last 12 months. This deterioration originates as delinquency levels increased at a gradual pace, now representing 48.4% of current collateral balance.

In Fitch's view, the notes have a direct exposure to non-performing loans (NPL) and potential recoveries from servicing the delinquent portfolio, mortgage insurance (MI) effectiveness, and REO sales in order to achieve full payment of the notes at maturity date. Thus, the current ratings represent a high level of liquidity and credit risk. Recovery estimates under current conditions are deemed to be in excess of 75%.

MTROCB 08U

Current ratings reflect the persistent deterioration of CE in the form of OC. The proportion of NPLs over total current collateral balance has increased to 44.0% from 41.6% during the last 12 months, keeping excess spread negative. Both indicators contribute to the deterioration of OC, reaching -90.8% as of October 2015.

In Fitch's view, the transaction would maintain a high exposure to resolution of NPLs, MI effectiveness, and REO sales in order to achieve full payment of the notes. According to Fitch current ratings represent a high level of liquidity and credit risk. Recovery estimates under current conditions are deemed to be in excess of 60%.

RATING SENSITIVITIES
Rating upgrades are limited for both transactions. Lengthy periods of low recoveries and/or an increase in late-stage arrears and subsequent defaults beyond Fitch's expectations could pressure ratings leading to a downgrade.

DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has taken the following rating actions:

MTROCB 07U
--UDI indexed notes downgraded to 'CCsf'/RE 75% from 'CCCsf' and National Scale long-term rating to 'CC(mex)vra'/RE 75% from 'CCC(mex)vra'.

MTROCB 08U
--UDI indexed notes affirmed at 'Csf'/RE 60% and National Scale long-term rating at
'C(mex)vra'/RE 60% .