April 25 (Bloomberg) -- Standard & Poor's said it may lower ratings on bonds from 11 different securitizations of home loans made last year, more than doubling the number of its warnings on bonds of so-called Alt A mortgages. S&P said it's considering the move amid higher-than-anticipated delinquencies.

Six of the bonds, with $23.4 million in balances, were composed of Alt A mortgages, which are loans considered a credit level above subprime and are made to people with generally good credit histories who opt for atypical underwriting or terms. Four were backed by second mortgages, and two were of subprime loans, to consumers with poor credit or high debt, S&P said.

Issuers of the Alt A securities were trusts used by New York-based Bear Stearns Cos., the top underwriter of mortgage bonds; Charlotte, North Carolina-based Bank of America Corp., the largest U.S. bank by assets; and Calabasas, California-based Countrywide Financial Corp., the largest home lender.

Early delinquencies in the bonds may be high because of ``aggressive residential mortgage loan underwriting, first-time home-buyer programs, piggyback second-lien mortgages, speculative borrowing for investor properties, and a higher concentration of `affordability' loans,'' S&P said, referring to loans allowing borrowers to initially pay only interest or less.

New York-based S&P made the announcement in a statement late yesterday; the firm had outstanding downgrade warnings on four securities backed by Alt A mortgages from 2006.

Reassessing Ratings

Rating services S&P, Moody's Investors Service, Fitch Ratings and DBRS Ltd. in November broke with their past practice of waiting for at least a year before reassessing initial ratings on residential mortgage securities, amid record early delinquencies on subprime loans as a housing boom ended.

Ten of the deals S&P said yesterday that it may cut were sold in the first half of 2006, before it began requiring that such securities provide increased loss protection for investors. Loans in some of the deal haven't yet experienced loses after foreclosures, in keeping with a new policy S&P announced in February.

The first Alt A bond that S&P warned about, in February, was issued by Countrywide and backed by loans from Impac Mortgage Holdings Inc., an Alt A lending specialist in Newport Beach, California. It hasn't been downgraded yet.

Impac had issued two of the Alt A bonds that S&P warned about last month, and UBS AG had created the remaining one. Countrywide's loans accounted for 83 percent of the collateral for the Bank of America security in the warning yesterday, according to data compiled by Bloomberg. Bear Stearns' EMC Mortgage unit originated 67 percent of loans in the bond that it sold.

Lower Criteria

Alt-A mortgages are usually defined as ones that fall just short of the typical credit criteria of Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac, and banks that look to their standards to decide which borrowers get the best rates.

They include more loans with less documentation of borrower income or assets, secondary financing used as down payments, and money used to purchase second homes and rental units, or make speculative property investments. Many Alt-A loans are interest- only or ``option'' adjustable-rate mortgages with minimum payments that can fail to cover the interest owed.

Late payments of at least 60 days, foreclosures and seized property among Alt-A mortgages in bonds have about doubled since mid-2005 to 2.4 percent, matching the rise for subprime mortgages, analysts at UBS AG wrote in a report last month.

A subset of Alt-A loans to borrowers with low credit scores and low equity and documentation is performing about as badly as subprime, according to Citigroup Inc. and Bear Stearns.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net.

Last Updated: April 25, 2007 12:55 EDT