Moody's has placed the ratings on 41 tranches of senior and mezzanine mortgage-backed bonds on review for possible downgrade. The rating action results from another criteria change that recognises the exposure of investors in these tranches to "tail risk".Moody's defines tail risk, in this case, as the risk of a disproportionately large loss emerging at the end of a transaction's life, when few loans remain in the pool and when credit enhancement and/or liquidity is low in dollar terms. Moody's recognises that lenders' mortgage insurance will help mitigate this risk but argues that allowance must be made for adjustments and other losses not covered by LMI.With 30 of the affected RMBS tranches having Aaa ratings, the downgrades will be sizeable. Moody's will use scenario analysis and stress-testing on the affected transactions to determine likely pool losses and payment delays.Moody's said that if an RMBS transaction is covered by LMI, and passes the stress test, the senior and mezzanine tranches' ratings will then be capped at the rating of the LMI provider, provided liquidity in the pool is sufficient. If liquidity is insufficient, the ratings will be a notch lower than those of the LMI provider.If an RMBS transaction fails the stress test, however, its ratings will be lowered to levels commensurate with the losses incurred.Moody's rates Genworth Financial Mortgage Insurance Pty Ltd at A3 and QBE Lenders Mortgage Insurance Limited at A2.Among affected transactions are mortgage-backed bonds from Challenger, FirstMac, Interstar (ie, National Australia Bank), Puma (ie, Macquarie), Rams/RHG and Wide Bay.