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Class B-4 of Structured Asset Securities Corp. 2003-7H mortgage pass-through certificates has been downgraded from B to CC/DR3 and removed from Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the deal. The downgrade reflects deterioration in the relationship between credit enhancement and expected losses, the rating agency said.

Six classes from three Associates Manufactured Housing Contract Trust pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 1996-1, classes B-1 and B-2, from AA-plus to AA; series 1997-1, classes B-1 and B-2, from AA-plus to AA; and series 1997-2, classes B-1 and B-2, from AA-plus to AA. Fitch also affirmed the ratings on six classes from four Associates transactions. The downgrades were attributed to the downgrade from AA-plus to AA of the corporate rating of Citigroup, which acquired Associates First Capital Corp. in 2000. The ratings of the downgraded classes depend on a limited guarantee from Associates.

Nine classes from mortgage pass-through certificates issued by Lehman Brothers in 2006 have been downgraded by Fitch Ratings.In addition to the downgrades in LMT 2006-6 group 1 and LMT 2006-9, Fitch also placed one class on Rating Watch Negative and removed one class from Rating Watch Negative. Fitch also affirmed the ratings on 11 LMT classes. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and expected losses. The collateral for the deals consists of alternative-A mortgage loans.

Fifty-four classes from 17 issues of SARM mortgage pass-through certificates have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on $6.3 billion of securities from the 17 SARM issues. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The collateral for the deals consists of adjustable-rate and hybrid adjustable-rate alternative-A mortgage loans.

Freddie Mac has announced a change in its policy regarding the purchase of delinquent mortgage loans from pools underlying Mortgage Participation Certificates.Freddie said it will now generally purchase mortgages that are 120 days or more delinquent when they have been modified, the subject of a foreclosure sale, or delinquent for 24 months, or when the cost of guarantee payments to securityholders exceeds the cost of holding the nonperforming loans in its mortgage portfolio. "Freddie Mac believes that the historical practice of purchasing loans from PC pools at 120 days does not reflect the pattern of recovery for most delinquent loans, which more often cure or prepay rather than result in foreclosure," the company said. "Allowing the loans to remain in PC pools will provide a presentation of its financial results that better reflects Freddie Mac's expectations for future credit losses." Freddie can be found online at http://www.freddiemac.com.

The National Association of Home Builders is urging Fannie Mae to roll back a planned 25-basis-point surcharge that lenders would pay when they deliver loans to the giant secondary market agency."This is no time for Fannie Mae's business interests to take precedence over its mission responsibility," said Jerry Howard, the NAHB's executive vice president and chief executive. The builders are one of Fannie's strongest allies, and they have consistently opposed government efforts to impose "user fees" on Fannie and Freddie Mac, which the association terms a tax on homebuyers. In this case, the user fee is being imposed by Fannie Mae, Mr. Howard said. "We oppose it, and urge Fannie to reconsider." The 25-bps delivery fee is slated to go into effect March 1. The NAHB can be found on the Web at http://www.nahb.com.

The default rate on subprime mortgage loans jumped nearly 160 basis points in September to a new record high of 17.73%, and the foreclosure rate jumped 47 bps to 7.24%, according to a Friedman Billings Ramsey Investment Management report.Defaults on securitized subprime mortgages had doubled over the previous 12 months. For the first time since the 2001 recession, "the majority of metropolitan statistical areas are experiencing year over year increases in default rates in each of prime, Alt-A and subprime loans," Michael Youngblood, FBRIM's managing director of fixed-income research, says in the report. The researcher points out that default rates in 52 MSAs, representing 46% of all subprime loans, had increased by 200% or more in September 2007 from the levels of a year earlier. The 52 MSAs are concentrated in Arizona, California, Florida, Nevada, Oregon, and the District of Columbia. The default rate on alternative-A loans moved up from 3.96% in August to 4.61% in September. FBRIM is a subsidiary of Friedman Billings Ramsey, which can be found online at http://www.fbr.com.

United Bank of Switzerland -- once a huge provider of warehouse credit to subprime firms -- says it will take a $10 billion writedown on collateralized debt obligations that are triple-A rated even though these investments are "senior" to similarly rated tranches of the same bond issue.UBS -- which released the news at 1 a.m. Monday -- blamed the writedown on America's subprime crisis, homeowner delinquencies, and "worsening market expectations of future developments." In tandem with the writedown announcement, UBS said two foreign investors have committed to invest $11.5 billion in the company to help shore up its capital position. UBS is based in Zurich. One of the investors in the Swiss bank is the Government of Singapore Investment Corp., or GIC.

Class M of American Business Financial Services mortgage pass-through certificates series 2003-2 has been downgraded from AA to A-plus and removed from Rating Watch Negative by Fitch Ratings.Fitch also affirmed the triple A rating of class A in the deal. The downgrade was attributed to the recent downgrade of Radian Asset Assurance Inc.'s insurer financial strength rating to A-plus. The rating of class M is based on a guarantee from Radian Asset Assurance. The collateral for the transaction generally consists of first- and second-lien home equity loans.

Two classes of mortgage pass-through certificates in Mortgage Asset Securitization Transactions Specialized Loan Trust deals have been downgraded by Fitch Ratings.Class M-5 of series 2005-3 was downgraded from BBB-minus to BB, and class M-6 was downgraded from BB to B. Fitch also placed classes M-3 and M-4 of series 2005-3 and classes M-4 and B of series 2005-1 on Rating Watch Negative and affirmed the ratings on 15 classes in three MASTR securitizations. The rating agency attributed the downgrades to deterioration in the relationship between credit enhancement and loss expectations. Fitch said the collateral backing the transactions consists primarily of first- and second-lien fixed- and adjustable-rate mortgage loans.