S&P weighs downgrades on $7.3 billion in subprime MBS

Falling home prices, rising defaults and evidence that mortgage fraud during the housing boom was more widespread than previously known has Standard & Poor's considering downgrading its ratings on $7.35 billion in securities backed by subprime loans.

The news that the ratings agency had placed 612 classes of residential mortgage-backed securities on "CreditWatch negative" Tuesday sent Treasury rates up and the dollar down, and could increase the cost of financing a home for some borrowers with blemished credit.

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