Servicing

Three classes of Terwin Mortgage Trust asset-backed certificates have been downgraded by Fitch Ratings.The downgrades in Terwin 2003-6HE were as follows: class M-3, from BBB-minus to BB; class M-4, from BB to B; and class M-5, from B to C/DR5. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral backing the deal consists of first- and second-lien mortgage loans.

Four classes of Asset Backed Funding Corp. mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 2004-FF1, class M-4, from BB-plus to B, class M-5, from BB to CC/DR4, and class M-6, from BB-minus to C/DR4; and series 2004-OPT1, class M-6, from BBB to B. Fitch also affirmed the ratings on eight other classes in the two transactions. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral backing the deals consists of first- and second-lien subprime mortgage loans.

Thirty-eight classes of mortgage-backed securities from two issuers were downgraded by Fitch Ratings on Dec. 28 as a result of changes to its subprime loss forecasting assumptions.Fitch also affirmed the ratings on classes with outstanding balances of approximately $600 million. The securities affected by the latest downgrades were 27 classes of SASCO mortgage pass-through certificates and 11 classes of Securitized Asset Backed Receivables mortgage pass-throughs. The rating actions were attributed to changes in Fitch's subprime loss forecasting assumptions that "better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness." The rating agency can be found online at http://www.fitchratings.com.

Fitch Ratings has assigned Houston-based Litton Loan Servicing LP primary and special servicer ratings for small-balance commercial products.The primary servicer rating is SBPS2, and the special servicer rating is SBSS2. Fitch said the ratings reflect Litton's "experienced management team, strong servicing platform, and effective risk management practices." The special servicer rating is based on the company's ability to use "robust default management and technology expertise" in liquidating nonperforming assets. Fitch rates commercial servicers on a scale of 1 to 5, with 1 being the highest rating. Litton is a subsidiary of Credit-Based Asset Servicing and Securitization LLC, which can be found online at http://www.c-bass.com.

Class B-2 of Conseco Home Equity 2002-B has been downgraded from B-plus to B-minus/DR1 by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the transaction. The downgrade was attributed to a deteriorating relationship between credit enhancement and expected losses. The collateral for the deal consists of closed-end, first- and second-lien mortgage loans.

Three classes of Fieldstone Mortgage Investment Trust series 2004-3 mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: class M-6, from BBB-plus to BBB; class M-7, from BBB to BB; and class M-8, from BBB to B. Fitch also affirmed the ratings on three other classes in the transaction. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses.

Four classes of Countrywide residential mortgage-backed securities issued in 2004 have been downgraded by Fitch Ratings.The downgrades were as follows: CWMBS 2004-3, class B-4, from CC/DR4 to C/DR4; CWMBS 2004-8, class B-3, from BB to BB-minus, and class B-4, from B to CCC/DR2; and CWMBS 2004-J3, class B-3, from BB-minus to B. Fitch also placed class B-4 of CWMBS 2004-9 and class B-4 of CWMBS 2004-J9 on Rating Watch Negative, removed classes 1-A-3 and 1-A-7 of CWMBS 2004-8 from Rating Watch Negative, and affirmed the ratings on 117 classes from 23 CWMBS transactions. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral backing the deals consists primarily of 30- and 15-year fixed-rate, first-lien prime mortgage loans.

Seven certificates issued by Merrill Lynch Mortgage Investors Inc. and Specialty Underwriting and Residential Finance Trust in 2003 and 2004 have been downgraded by Moody's Investors Service.The downgrades were as follows: Merrill Lynch series 2003-BC4, class B-1, from Baa1 to Baa3, class B-2, from Baa2 to Ba2, and class B-3, from Baa3 to Ca; SURF series 2004-BC1, class B-1, from Baa2 to Ba2, and class B-2, from Baa3 to Caa2; and SURF series 2004-BC2, class B-1, from Baa2 to B1, and class B-2, from Baa3 to Ca. Stepping down and "continuous losses" have left the deals with thin credit enhancement levels and made tranches at the bottom of the capital structure more vulnerable to pool deterioration, Moody's said. The transactions are backed by first- and second-lien subprime mortgage loans.

Eleven classes of mortgage pass-through certificates from four Ace Securities Corp. subprime transactions have been downgraded by Fitch Ratings.The downgrades came in series 2002-HE2, series 2004-HE1, series 2004-HS1, and series 2004-OP1. The downgrades were attributed to deterioration in the relationship between credit enhancement and expected losses.

Sixteen tranches of CSFB mortgage pass-through certificates issued in 2004 have been downgraded by Moody's Investors Service.Moody's also upgraded one tranche of CSFB pass-throughs. The actions were based on an analysis of the credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to expected losses, the rating agency said. The underlying collateral of the affected tranches consists of first-lien, alternative-A, adjustable-rate mortgage loans.