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Five classes from three subprime issues of Ameriquest Mortgage Securities Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 2002-AR1, class M-3, from BBB to B, and class M-4, from BBB-minus to B; series 2003-6, class M-5, from BBB to BBB-minus (and removed from Rating Watch Negative), and class M-6, from B to C/DR4 (and removed from Rating Watch Negative); and series 2004-R11, class M-10, from BB-plus to CCC/DR1. Fitch also affirmed the ratings on 16 classes from the three deals. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Five classes of Meritage Mortgage Corp. asset-backed certificates, series 2003-1, have been downgraded by Fitch Ratings.The downgrades were as follows: class M-3, from A to BB; class M-4, from A-minus to B; class M-5, from BBB-plus to CCC/DR1; class M-6, from BBB to CCC/DR2; and class M-7, from BBB-minus to C/DR5. Fitch also affirmed the ratings on two classes in the deal. The downgrades reflect continued deterioration in the relationship between credit enhancement and loss expectations, the rating agency said.

Six classes from two CDC Mortgage Capital Trust issues of subprime mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 2002-HE1, class M, from A to A-minus, and class B, from B-plus to CC/DR3; and series 2003-HE2, class M-3, from A-minus to BB-plus, class B1, from BBB to B, class B2, from BB to CC/DR3, and class B3, from B-plus to C/DR5. Fitch also affirmed the ratings on three other classes from the two deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Six classes from Park Place Securities 2004-MCW1 subprime mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: class M-5, from A to A-minus; class M-6, from A-minus to BBB-plus; class M-7, from BBB-plus to BBB; class M-8, from BBB to BB-plus; class M-9, from BBB to BB (and removed from Rating Watch Negative); and class M-10, from BBB-minus to B (and removed from Rating Watch Negative). Fitch also affirmed the ratings on five classes from the deal. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Seven classes from two subprime issues of Aegis Asset-Backed Securities have been downgraded by Fitch Ratings.The downgrades were as follows: series 2003-2, class M2, from A to A-minus, and class B, from BB-plus to CCC/DR2; and series 2004-5, class M2, from A to A-minus, class M3, from A-minus to BBB, class B1, from BBB-plus to BB-plus, class B2, from BBB to BB, and class B3, from BBB-minus to B. Fitch also affirmed the ratings on four classes from the two deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Twenty classes from nine Morgan Stanley issues of subprime mortgage-backed securities have been downgraded by Fitch Ratings.The rating agency also placed four classes on Rating Watch Negative and affirmed the ratings on 35 issues from 10 Morgan Stanley MBS issues. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Seventy-six tranches from 19 U.S. cash-flow and hybrid collateralized debt obligations have been placed on CreditWatch with negative implications by Standard & Poor's Ratings Services.The issuance amount of the affected tranches totals approximately $2.16 billion, S&P reported. Ten of the affected deals are collateralized by trust-preferred securities issued by real estate investment trusts, and the other nine are backed by mezzanine structured finance securities, including residential mortgage-backed securities collateralized by first-lien subprime mortgages. Including the latest CreditWatch placements, 193 tranches (representing issuance amounts totaling approximately $6.60 billion) from 57 cash-flow and hybrid CDOs are on CreditWatch with negative implications due to exposure to RMBS that have experienced "negative credit migration," the rating agency said.

Over 100 classes of subprime residential mortgage-backed securities with outstanding balances totaling more than $2 billion were downgraded by Fitch Ratings on Aug. 9.Fitch also affirmed the ratings on classes with outstanding balances of more than $18 billion. Among the downgrades were the following mortgage pass-through certificates: 48 classes from 11 SAIL issues; 42 classes from six Structured Asset Securities Corp. issues; and 11 classes from two BNC issues. Fitch reported that as of the end of the day on Aug. 9, it had downgraded 671 classes (with an outstanding balance of $12 billion) from subprime RMBS deals placed Under Analysis on July 12 and affirmed the ratings on 1,189 classes with an outstanding balance of $104 billion. Fitch can be found on the Web at http://www.fitchratings.com.

The Federal Agricultural Mortgage Corp., Washington, has reported net income available to common stockholders of $18.4 million ($1.74 per share) for the second quarter, compared with $13.4 million ($1.18 per share) for the second quarter of 2006.Farmer Mac said its outstanding program volume stood at a record high of $8.4 billion as of June 30. "The growth of the portfolio, and our confidence in its performance, derive from the success of business strategies we implemented in the fall of 2005 that emphasize large program transactions with high asset quality, providing greater protection for Farmer Mac against adverse credit performance with commensurately lower compensation for its assumption of credit risk and administrative costs," said Henry D. Edelman, Farmer Mac's president and chief executive officer. The government-sponsored enterprise can be found online at http://www.farmermac.com.

Delta Financial Corp., Woodbury, N.Y., has filed a form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission for its second-quarter 10-Q.The company said it has begun to negotiate to add new sources of capital, and that the results would materially affect its financial condition. However, it said it expects to file the 10-Q within five days. In its filing, Delta said it expected to report second-quarter 2007 net income of $777,000 ($0.03 per share), compared with $7.2 million ($0.31 per share) a year earlier. Part of the reason for the decline was a $3.9 million noncash decrease in net interest income as a result of changes in prepayment assumptions. Prepayments are occurring slower than previously anticipated. The $3.9 million is now recognized as deferred revenue. Delta's provision for loan losses increased by $6.3 million during the second quarter. The increase, except for a specific provision for impaired loans, corresponds to the performance and seasoning of loans held for investment, Delta said.