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Fitch Affirms 8 Classes of Home Re 2005-2 Limited; Places 1 Class on Watch Negative

NEW YORK - (BUSINESS WIRE) - Fitch Ratings affirms the following classes of Home Re 2005-2 Limited:

--Class M2 at 'AA'; Outlook Stable;

--Class M3 at 'AA-'; Outlook Stable;

--Class M4 at 'A+'; Outlook Stable;

--Class M5 at 'A'; Outlook Stable;

--Class M6 at 'A-'; Outlook Stable;

--Class M7 at 'BBB+'; Outlook Negative;

--Class M8 at 'BBB'; Outlook Negative;

--Class M9 at 'BBB-'; Outlook Negative;

--Class B1 at 'BB+'; Outlook Negative;

--Class B2 at 'BB'; Rating Watch Negative.

In addition, Fitch places class B2 on Rating Watch Negative.

Home Re 2005-2 is a synthetic transaction which references the mortgage insurance provided by Mortgage Guaranty Insurance Corporation (MGIC) on a static pool of first lien, fixed- and adjustable-rate fully-amortizing residential mortgage loans. Home Re Limited and Home Re Credit Limited (the Issuers) and MGIC entered into a reinsurance agreement reinsuring loss amounts incurred by MGIC relating to the mortgage insurance on the mortgage loans.

The actions taken are based on an analysis of the exposure to claims on the mortgage insurance policies on the underlying pool relative to each notes enhancement. Fitch calculated the claims exposure by assigning performance adjusted pre-2005 vintage average subprime frequency of foreclosure (FOF) percentage to the portfolio. Fitch then assumed that 100% of the exposure would be realized as impairment to the notes.

Losses are allocated to the notes in reverse order of priority. The notes are not written down by losses, however an impairment amount is calculated for each note equal to the amount of losses that have been allocated to it. The ratings on the notes address the timely payment of interest and ultimate repayment of principal upon maturity.

Additional details are available in the following research on the Fitch Ratings web site at www.fitchratings.com:

--'Fitch Downgrades MGIC on Announced Restructuring Plan' (published July 16, 2009).

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings, New York
Tara Sweeney, +1-212-908-0347
Michele Patterson, +1-212-908-0779
Media Relations:
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com