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Twenty-nine classes of mortgage pass-through certificates from eight Banc of America Alternative Loan Trust transactions have been downgraded by Fitch Ratings. Fitch also placed two classes on Rating Watch Negative and affirmed the ratings on over 100 classes from the BoA deals. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral consists of fixed-rate, first-lien mortgage loans.

Forty-three classes of pass-through certificates from seven LMT mortgage securitizations have been downgraded by Fitch Ratings. Fitch also placed two classes on Rating Watch Negative, removed two classes from Rating Watch Negative, and affirmed the ratings on 10 LMT classes. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and loss expectations. Fitch can be found on the Web at http://www.fitchratings.com.

DBRS, a Toronto-based rating agency, has downgraded 218 classes from 51 residential mortgage-backed securities transactions. The securities, backed primarily by first-lien collateral, were downgraded as a result of a "significant increase in serious delinquencies relative to the available credit enhancement." As a result, excess spread is not expected to be sufficient to cover anticipated losses, the rating agency said.

Downey Financial Corp., a Newport Beach, Calif.-based savings and loan, has reported a mortgage-related net loss of $56.6 million ($2.03 per share) for 2007, compared with net income of $199.7 million ($7.16 per share) in 2006. Downey said a key reason for the poor results was a $283.5 million increase in its provision for credit losses stemming from single-family loan delinquencies and foreclosure-related losses. The thrift also cited a $94.8 million decline in net interest income and a $23.3 million decline in net gains on the sale of loans and mortgage-backed securities, among other things, as contributors to the loss. For the fourth quarter, the company reported a net loss of $108.8 million ($3.90 per share), compared with net income of $52.1 million ($1.87 per share) a year earlier. Downey can be found online at http://www.downeysavings.com.

Goldman Sachs & Co. has filed a $5 million unsecured claim in bankruptcy court against the now-defunct First NLC Financial Services, Deerfield Beach, Fla., a subprime lender owned by Friedman Billings Ramsey. According to First NLC's filing in West Palm Beach, Fla., Goldman is the largest unsecured creditor of the company. Others that are owed money include HSBC Mortgage Services ($3 million), Deutsche Bank ($2 million), and U.S. Bank Corp. ($1 million). Most of the claims are tied to "representations and warranties" on loan buybacks. The filing lists 20 unsecured creditors that are owed roughly $16 million. Some include former employees trying to collect on severance benefits. According to the Mortgage Industry Directory, a SourceMedia publication, First NLC was once a top-30-ranked subprime funder.

American General Finance has agreed to pay $1.49 billion to Popular Inc. -- a 3% premium -- for most of its subprime loan portfolio. A spokesman for the San Juan, Puerto Rico-based Popular told MortgageWire that most of the loans are subprime in nature and carry fixed rates. "It's a good deal for us and it's a good deal for them," he said. "We get cash and are exiting the market." He added that the loans are "well documented." The mortgages were funded by the bank's Equity One consumer finance division, a company Popular has owned since 1991. The New York-based AGF will also take control of 24 Equity One branches, all of which are located in the continental United States. AGF is a subsidiary of American International Group, an insurance conglomerate.

The California economy is being strangled by limited access to mortgage credit, according to California Gov. Arnold Schwarzenegger, who wants Congress to raise the Fannie Mae and Freddie Mac lending limit from $417,000 to $625,000 as part of an economic stimulus package. "Raising these limits would do more than anything else to pump badly needed credit back into the housing market and revive our economy," Gov. Schwarzenegger says in a letter to House and Senate leaders. More than 50% of California's housing stock is priced above the current GSE loan limit of $417,000. "When combined with the withdrawal of the jumbo loan market, it's no surprise that current home sales activity in California is half the pace seen in 2006," the governor said. The former movie star also pointed out that raising the loan limit for the government-sponsored enterprises automatically raises the limit on loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. "Nothing will more beneficially improve the United States economy than immediately raising these limits," he said. California Realtors, builders, mortgage bankers, and brokers are also urging Congress to raise the GSE loan limit to $625,000 as part of a stimulus package.

Four classes of pass-through certificates from a Wells Fargo Alternative Loan Trust securitization have been downgraded by Fitch Ratings. The downgrades from WFALT 2007-PA1 were as follows: class B-2, from A to A-minus; class B-3, from BBB to BB-plus; class B-4, from BB to B; and class B-5, from B to C/DR5. Fitch also affirmed the ratings on two other classes in the deal. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of fixed-rate, conventional first-mortgage loans.

Five classes of IndyMac Residential Asset Securities Trust mortgage pass-through certificates have been downgraded by Fitch Ratings. The downgrades from RAST 2007-A3 were as follows: class B-1, from AA to AA-minus; class B-2, from A to BBB-plus; class B-3, from BBB to BB-minus; class B-4, from BB to C/DR4; and class B-5, from B to C/DR5. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations.

Nine classes of pass-through certificates from two RBSGC Mortgage Loan Trust securitizations have been downgraded by Fitch Ratings. Fitch also affirmed the ratings on 11 classes from three RBSGC deals. The downgrades were attributed to deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of fixed-rate, first-lien mortgage loans.