*Obama admin proposes less reliance on credit ratings

*Wall St not in favor of separate rating scale for MBS

*Obama admin to push further reforms for credit agencies
(Adds Fitch comment)

By Rachelle Younglai and Tom Ryan

WASHINGTON/NEW YORK, June 15 (Reuters) - The Obama
administration is pushing tough reforms for credit rating
agencies and wants them to differentiate between corporate
bonds and mortgage-backed securities -- a measure long opposed
by Wall Street and the real estate finance industry.

Under the White House plan for regulatory reform, to be
introduced on Wednesday, agencies such as Moody's Corp (MCO.N: Quote, Profile, Research),
Standard & Poor's (MHP.N: Quote, Profile, Research) and Fimalac SA's (LBCP.PA: Quote, Profile, Research) Fitch
Ratings could be required to create a separate rating scale for
products linked to mortgages and other loans.

"A rating is a rating, regardless of asset class it should
mean the same thing," said Brendan Reilly, senior vice
president with the Commercial Mortgage Securities Association,
which represents the commercial real estate finance industry.

"If you put a symbol on (structured products) you would in
some way suggest that that rating is different, because why
else would you have to put some kind of modifier on it," Reilly
said on Monday.

But opponents say that change will hurt ordinary investors
and credit markets.

Wall Street and the real estate industry say a symbol or
some kind of modifier to a triple A rating would prevent
pension funds and mutual funds from considering structured
products because they are only allowed to buy investment grade
securities. This would in turn crimp the credit markets, which
have begun to show signs of improvement.

The administration's plan will require rating agencies to
publicly disclose more information about the methodology they
use to rate structured finance products such as asset backed
securities, a Treasury Department spokesman said on Monday.

The White House also wants to reduce the reliance of
investors and regulators on credit rating agencies, according
to a newspaper editorial by U.S. Treasury Secretary Timothy
Geithner and White House economic adviser Lawrence Summers.

Most of the administration's plans are being addressed by
the U.S. Securities and Exchange Commission, which gained
oversight of the rating agencies through a 2006 law designed to
promote competition in the industry.

Last year, the SEC adopted rules to rein in the business
practices of credit rating agencies and require more disclosure
about a security's underlying assets. Credit agency employees
are banned from rating the same product they structure, as well
as from negotiating fees for the product they helped rate.

The SEC proposed differentiating structured products from
corporate bonds and removing most of the references to ratings
in federal securities rules, but has yet to make a final
decision.

The latter was criticized by the mutual fund industry and
Wall Street players who said requiring highly rated securities
for money market funds gives investors faith in the funds and
creates standards for assessing credit risks.

However, some investment managers back the idea of relying
less on the credit rating agencies.

"If you can't come up with the analytic yourself, you
shouldn't be investing," said Max Bublitz, chief strategist
with SCM Advisors in San Francisco.

Support from the White House may make it easier for the SEC
to work against industry's wishes.

The largest rating agencies S&P, Moody's and Fitch have
been berated for not doing due diligence before assigning top
ratings to structured products that later deteriorated when the
U.S. housing market collapsed.

A Moody's spokesman said the agency was looking forward to
reviewing the detailed proposal. Fitch Ratings said it was
supportive of the "concepts" of the administration's plan. S&P
had no comment.

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(Reporting by Rachelle Younglai; Editing by Andre Grenon and
Matthew Lewis)