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Ten tranches from three Specialty Underwriting and Residential Finance Trust deals issued in 2003 have been downgraded by Moody's Investors Service.Although the losses on the deals -- series 2003-BC1, series 2003-BC2, and series 2003-BC3 -- fall within original expectations, the downgrades are based on recent and expected pool losses and the resulting actual and expected erosion of credit support, Moody's said. Overcollateralization in series 2003-BC1 and 2003-BC2 has been fully depleted, and the class B-2 certificates are realizing losses. "In addition, the overcollateralization amount in the 2003-BC1 transaction is significantly below its floor, and pipeline losses are likely to cause further erosion of the overcollateralization," the rating agency said. The collateral consists of first-lien residential mortgage loans.

Seventeen tranches from five Equifirst Mortgage Loan Trust transactions closed in 2003 and 2004 have been downgraded by Moody's Investors Service.The downgrades were based on the fact that the bonds' credit enhancement levels, including excess spread, were too low in view of projected losses. All the transactions are backed primarily by fixed- and adjustable-rate first-lien subprime mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

Freddie Mac has updated its offering of $6 billion of preferred stock, announcing that it will only involve an offering of nonconvertible, noncumulative perpetual preferred stock.The company said it no longer plans to offer convertible noncumulative perpetual preferred stock, as it had indicated in a recent announcement.

Fast Home Auction, Tampa, Fla., has launched an auction website that enables real estate professionals to buy and sell defaulted and foreclosed properties across the country "with the ease of the familiar online merchandise auction concept."Fast Home Auction president James Case said asset managers of real estate owned have traditionally posted properties on their own websites, but most people don't know how to find them. "Online auctions present an efficient mechanism for buyers to acquire foreclosed property from the REO asset managers," Mr. Case said. FastHomeAuction.com uses e-mail notification to allow potential bidders to receive notices of forthcoming auctions in areas they specify. "The site makes it easy to list and bid on properties for sale using the online format we've become so familiar with over the years," Mr. Case said. The auction website can be found at http://www.fasthomeauction.com.

Fannie Mae has agreed to work with Hispanic and Asian real estate professionals through a new venture that will market the mortgage company's foreclosed properties to minority homebuyers.Gary Acosta, a co-founder of the National Association of Hispanic Real Estate Professionals, and Jim Park, president and chief executive of the Asian Real Estate Association of America, founded New Vista Asset Management to market real estate owned by using their connections with real estate brokers in minority communities. "New Vista is excited to work with Fannie Mae to create a new path to homeownership using these REO units," Mr. Park said. A former Freddie Mac executive, Mr. Park also wants to work with lenders to create loan products suitable for first-time homebuyers. "Our focus is to market and sell these units directly to first-time and minority homebuyers using a national network of real estate professionals with deep roots in minorities as well as initiate consumer-direct outreach efforts to pair up mortgage-ready homebuyers to available REO properties," Mr. Park said. Fannie Mae can be found online at http://www.fanniemae.com.

Lax underwriting and fraud may account for as much as 25% of the underperformance of the 2006 vintage of subprime residential mortgage-backed securities transactions, according to Fitch Ratings.Fitch said the high delinquency and default rates of recent-vintage subprime RMBS have many causes, including declining home prices and "the prevalence of high-risk mortgage products" such as stated-income loans and those with combined loan-to-value ratios of 100%. "In the absence of effective underwriting, products such as 'no-money-down' and 'stated-income' mortgages appear to have become vehicles for misrepresentation or fraud by participants throughout the origination process," said Fitch managing director Diane Pendley. "During the rapidly rising home price environment of the past few years, the ability of the borrower to refinance or quickly resell the property prior to the loan defaulting masked the true risk of these products and the presence of misrepresentation and fraud." The rating agency can be found online at http://www.fitchratings.com.

Citadel Investment Group -- which recently bought subprime lender ResMae -- has agreed to pump $2.5 billion in cash into E*Trade Financial, a company that has been struggling under the weight of huge mortgage writedowns.The New York-based E*Trade revealed the cash infusion plan Thursday morning, noting that its chief executive officer, Mitchell Caplan, had resigned from the company. A few weeks ago E*Trade's share price crumbled after a stock analyst said there was a 15% chance the online financial services firm would go bankrupt. (E*Trade denied the claim.) E*Trade, which has $12.8 billion in mortgage-backed bonds on its balance sheet, lost $58 million in the third quarter. The company can be found online at http://www.investor.etrade.com.

Class B3 of Merrill Lynch Mortgage Investors series 2004-HE1 has been downgraded from BBB-minus to B and removed from Rating Watch Negative by Fitch Ratings.Fitch also placed class B2 of the series on Rating Watch Negative and affirmed the ratings on three other classes in the deal. The negative rating actions were based on a deterioration in the relationship between credit enhancement and loss expectations. The collateral consists of first- and second-lien subprime mortgage loans.

Three classes of Park Place subprime mortgage-backed securities have been downgraded by Fitch Ratings.The downgrades were as follows: series 2004-MHQ1, class M-10, from BB-plus to B (and removed from Rating Watch Negative); and series 2004-WHQ1, class M-9, from BBB-minus to BB-plus, and class M-10, from BB-plus to BB (and removed from Rating Watch Negative). Fitch also placed class M-8 of series 2004-MHQ1 and classes M-8 and M-9 of series 2004-WHQ2 on Rating Watch Negative and affirmed the ratings on 25 classes from the three issues. The negative rating actions were attributed to losses that have exceeded excess spread, causing deterioration in the amount of overcollateralization. The collateral consists of closed-end, first-lien subprime mortgage loans.

Three classes of Ameriquest-linked subprime mortgage-backed securities have been downgraded by Fitch Ratings.The downgrades were as follows: Argent series 2004-W3, class M-4, from BBB-minus to BB, and class M-5, from BB-plus to B (and placed on Rating Watch Negative); and Ameriquest series 2003-AR3, class M-6, from BBB-minus to BB (and placed on Rating Watch Negative). Fitch also affirmed the ratings on eight other classes in the two transactions. The negative rating actions were attributed to losses that have exceeded excess spread, causing deterioration in the amount of overcollateralization. The collateral consists of closed-end, first-lien subprime mortgage loans.