Servicing

Class M-3 of ACE Securities Corp. Home Equity Loan Trust series 2002-HE3 has been downgraded from Baa1 to B3 by Moody's Investors Service.Moody's said losses over the past year have eroded the overcollateralization and caused credit enhancement to fall to a level that seems "too low to support the existing rating." The collateral for the deal consists of fixed- and adjustable-rate subprime mortgage loans.

Three subordinate certificates from the GSMPS Mortgage Loan Trust 2005-LT1 have been downgraded by Moody's Investors Service.The downgrades were as follows: class B1, from Baa2 to Baa3; class B2, from B1 to Caa1; and class B3, from Caa3 to Ca. The transaction consists of nonperforming loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, virtually all of which were repurchased from Ginnie Mae pools. Moody's said the insurance covers a large percentage of any losses stemming from borrower defaults, but that "recent losses have significantly eroded credit protection."

Five tranches from three securitizations issued by Credit Suisse in 2001 and 2002 have been downgraded by Moody's Investors Service.The downgrades were as follows: CS First Boston Mortgage Securities Corp. 2001-HE30, class M-2, from A3 to Baa3, and class B, from B1 to Caa3; CSFB Mortgage Backed Pass-Through Certificates series 2001-28, class I-B-1, from Baa3 to B1, and class I-B-2, from Caa1 to Ca, and series 2002-10, class II-B-3, from B1 to Caa1. "Each tranche being downgraded has low levels of credit enhancement relative to the proportion of severely delinquent loans remaining in the pool," the rating agency said. Moody's can be found on the Web at http://www.moodys.com.

Bridger Commercial Funding, San Francisco, has implemented the Mortgage Industry Standards Maintenance Organization's Commercial Servicing Transfer Standard with Midland Loan Services Inc.The companies said this shows the business practicality of using XML to accelerate information exchange between commercial lenders and servicers and validates MISMO's approach for using a rational XML-based transaction for data standardization of commercial and multifamily mortgages. "This proof of concept was needed before other industry players would seriously join the efforts around these standards," said Dave Bodi, executive vice president for Midland. The MISMO model will now be used as "the basic foundation for all new standard transactions," he said. Bridger can be found online at http://www.bridgerfunding.com, and MISMO can be found at http://www.mismo.org.

Two classes of Ace Securities Corp. series 2005-HE2 mortgage-backed securities have been downgraded by Fitch Ratings and four classes have been placed on Rating Watch Negative.Class B-1 was downgraded from BB-plus to BB, and class B-2 was downgraded from BB to BB-minus. Class M-10 was placed on Rating Watch Negative, as were classes M-9 and M-10 of series 2006-HE1 and class M-11 of series 2006-HE2. In addition, Fitch affirmed the ratings on 30 classes from three Ace Securities deals. Fitch said the negative rating actions resulted from a deteriorating relationship between loss expectations and credit enhancement. The pool consists of adjustable- and fixed-rate, first- and second-lien residential subprime mortgage loans. Fitch can be found online at http://www.fitchratings.com.

Three savings-and-loan institutions engaged in mortgage lending ranked among the 20 top-performing thrifts in 2006, according to SNL Financial, a Charlottesville, Va.-based research firm.Downey Financial Corp., Newport Beach, Calif., ranked seventh in SNL's annual performance ranking of the 100 largest thrifts, with a score of 78.6. (FirstFed Financial Corp. ranked No. 1 with 90.9.) Tied for ninth was BankUnited Financial Corp., Miami Lakes, Fla., while IndyMac Bancorp, Pasadena, Calif., ranked 13th, SNL reported. "The rankings show how profitable it was to be in the mortgage business in 2006," said Maria Tor, a senior analyst at SNL. "However, many of the companies that did so well in 2006 are now being punished in the stock market for possibly underwriting risky loans." The company can be found online at http://www.snl.com.

Three classes of Asset Backed Funding Corp. mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings.The affected classes are as follows: class M-3 of series 2002-SB1 and classes M-3 and M-4 of series 2003-WF1. Fitch also upgraded eight classes and affirmed the ratings on 63 classes from 12 ABFC issues. The rating agency attributed the negative rating actions to a deterioration in the relationship between credit enhancement and expected losses.

Class M-7 of Bear Stearns Asset Backed Securities Inc. mortgage pass-through certificates, series 2005-1, has been downgraded from BB to B-plus by Fitch Ratings.The rating agency also affirmed the ratings on 119 classes in 22 Bear Stearns deals. Fitch attributed the downgrade to a deterioration in the relationship between credit enhancement and loss expectations.

Four certificates from Ace Securities Corp. Home Equity Loan Trust series 2005-SL1 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-6, from Baa2 to Ba2; class M-7, from Baa3 to B3; class B-1, from Ba1 to Caa1; and class B-2, from Ba2 to Caa2. "The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to expected losses," Fitch said. The transaction is backed by second-lien, fixed-rate subprime mortgage loans.

Fourteen classes of Ace Securities Corp.'s mortgage securitizations have been downgraded by Fitch Ratings.In addition, Fitch upgraded 10 classes and affirmed the ratings on 51 classes from 13 Ace deals. The downgrades were attributed to a continued deterioration in the relationship between credit enhancement and expected losses. Faster-than-expected prepayments have resulted in a decreased amount of excess spread available to cover losses and maintain overcollateralization. The mortgage pool consists of conventional first- and second lien adjustable- and fixed-rate residential mortgage loans. Fitch can be found on the Web at http://www.fitchratings.com.