Servicing

Two tranches of Structured Asset Securities Corp. 2003-BC3 have been downgraded by Moody's Investors Service.Class M5 was downgraded from Baa3 to B3, and class M4 was downgraded from Baa2 to Ba3. The downgrades were based on "the analysis of the current credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to the expected loss," Moody's said. The transaction is backed by subprime fixed- and adjustable-rate mortgage loans.

Fourteen tranches from five securitizations issued by Long Beach Mortgage Loan Trust in 2003 and 2004 have been downgraded by Moody's Investors Service.The five deals affected by the downgrades were as follows: series 2003-2, 2003-3, 2003-4, 2004-1, and 2004-2. The actions are based on the analysis of the current credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to expected losses. The collateral consists primarily of first-lien, subprime fixed- and adjustable-rate mortgage loans.

Moody's Investors Service has downgraded 88 classes of certificates from 18 transactions issued in early 2007 and backed by closed-end second-lien mortgage loans.Moody's also placed 18 classes on review for possible downgrade from the same transactions. The negative rating actions were attributed to "the extremely poor performance" of closed-end second-lien loans securitized in early 2007. "These loans have seen a high rate of early default and deals backed by those loans have been continuously building up significant pipeline," Moody's said. "The performance closely tracks the performance of 'piggyback loans' securitized in 2006 due to the aggressive underwriting guidelines combined with prolonged home price decline." Issuers with eight or more downgraded classes in transactions affected by the Moody's actions were ACE Securities Corp. Home Equity Loan Trust, Bear Stearns Mortgage Funding Trust, Bear Stearns Second Lien Trust, First Franklin Mortgage Loan Trust, and SACO I Trust. Moody's can be found online at http://www.moodys.com.

Fitch Ratings has downgraded C-BASS Investment Management LLC's CDO asset manager rating from CAM1-minus to CAM3.Fitch said the rating remains on Rating Watch Negative pending the expected near-term resolution of the company's future operational status. Fitch rates asset managers of collateralized debt obligations by asset class on a scale of 1 to 5, with 1 being the highest rating. Fitch can be found on the Web at http://www.fitchratings.com.

The federal regulator of Fannie Mae and Freddie Mac has blasted New York Attorney General Andrew Cuomo for subpoenaing the two GSEs in connection with an appraisal fraud probe, arguing that "they have no economic incentive to knowingly purchase or guarantee mortgages with inflated appraisals.""I am disappointed that your office did not contact OFHEO before or even after subpoenaing the GSEs and issuing certain threats regarding their future business activities," writes OFHEO Director James Lockhart in a Nov. 8 letter to AG Cuomo. Mr. Lockhart wants an explanation from Mr. Cuomo in regard to his demand that the government-sponsored enterprises cease doing business with Washington Mutual, a large seller of mortgages to the GSEs. Earlier this week the New York AG said his office would subpoena the GSEs as part of a wider probe into mortgage industry practices. OFHEO is the safety-and-soundness regulator of Fannie and Freddie.

Standard & Poor's has changed its ratings outlook for Morgan Stanley and related entities from stable to negative due to the Wall Street firm's subprime mortgage-related multibillion-dollar revenue decline.S&P said it believes that, given offsetting gains in other business lines, Morgan Stanley "could at least have break-even net earnings for the quarter." However, the subprime-related writedowns have left "little leeway in the ratings to sustain additional setbacks," the rating agency said. Standard & Poor's can be found on the Web at http://www.standardandpoors.com.

Morgan Stanley has written down its revenue by $3.7 billion (about $2.5 billion after taxes) due to the deterioration in value of U.S. subprime mortgage-related exposures since August.The company said the writedowns would likely hurt its fixed-income business' fourth-quarter results, but that relative gains in other business lines may offset the concern. Morgan Stanley also said its subprime-related exposures will likely fluctuate further, but that it does not expect to provide any more updates before its regularly scheduled earnings reports. Morgan Stanley can be found online at http://www.morganstanley.com.

Class B-1 of GSC Capital Corp. Mortgage Trust 2006-2 has been placed on Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on 15 classes from two GSC Capital transactions. The negative rating action was attributed to a deterioration in the relationship of credit enhancement to loss expectations. The mortgage pools consist of adjustable-rate, first-lien mortgage loans.

Moody's Investors Service has downgraded 60 tranches from 11 deals issued by Countrywide in 2006 and placed 39 tranches under review for possible downgrade.Three downgraded tranches from the CWALT Inc. issues of mortgage pass-through certificates remain on review for possible downgrade. The negative rating actions were based on higher-than-expected rates of delinquency, foreclosure, and real estate owned relative to credit enhancement levels, Moody's said. The collateral backing the affected classes consists chiefly of first-lien, fixed- and adjustable-rate, alternative-A mortgage loans.

More than 200 classes of mortgage- and asset-backed securities have been downgraded by Fitch Ratings as a result of changes to its subprime loss forecasting assumptions.In addition to the 224 downgrades, Fitch placed 95 classes on Rating Watch Negative and affirmed the ratings on classes with outstanding balances of approximately $14 billion. Among the securities affected by the latest downgrades were: 36 classes from three Structured Asset Securities Corp. mortgage pass-through certificates; 30 classes from three Credit Based Asset Servicing & Securitization transactions; 29 classes from three Securitized Asset Backed Receivables transactions; 26 classes from two issues of Soundview asset-backed certificates; and 20 classes from two issues of HASCO mortgage pass-through certificates. The rating actions were attributed to changes to 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."