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Three certificates from MASTR Second Lien Trust series 2005-1 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-5, from Baa2 to B1; class M-6, from Ba2 to B3; and class M-7, from B2 to Ca. The downgrades were attributed to credit enhancement levels, including excess spread, that may be too low in view of the projected losses. "The projected pipeline loss has increased over the past few months and is likely to affect the credit support for these certificates," Moody's said. "Furthermore, many underlying first-lien loans are likely to have pending interest rate resets, which may cause an increase in delinquencies and defaults on the second-lien loans in the pool." The transaction is backed by subprime second-lien loans.

Five certificates from two deals issued by SACO I Trust in 2006 have been downgraded by Moody's Investors Service, and one of the downgraded classes and three other classes have been placed on review for possible downgrade.The downgrades were as follows: series 2006-1, class M-3, from Baa2 to B3 (and placed on review for possible further downgrade), and class M-4, from Baa3 to C; and series 2006-12, class I-M-2, from A2 to B3, class I-M-3, from Baa2 to Ca, and class I-M-4, from Ba1 to C. Classes M-1 and M-2 of series 2006-1 and class I-M-1 of series 2006-12 were placed on review for possible downgrade. The rating actions were taken because the transactions, backed by home equity line-of-credit loans, have seen recent losses that have surpassed the excess spread available, thereby depleting the overcollateralization, Moody's said. The rating agency can be found online at http://www.moodys.com.

Eleven classes of GS Mortgage Securities Corp. certificates from two GSAMP transactions have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on seven other classes in the two transactions, series 2004-AR2 and series 2004-OPT. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The deals consist of closed-end fixed-rate mortgage loans secured by second liens on residential properties. Fitch can be found online at http://www.fitchratings.com.

The New York office of DBRS, a Toronto-based rating agency, has downgraded 298 classes from 63 residential mortgage-backed securitizations, citing serious delinquencies and losses in the collateral.First-lien collateral represents the primary backing for 227 of the downgraded classes and second-lien collateral is the primary support for the remaining 71 classes. In the classes backed primarily by second-lien collateral, "overcollateralization has been depleted in many transactions and excess spread continues to diminish," DBRS said. "Additionally in many cases subordinate classes have already been impaired, further weakening the available credit support for the remaining senior and mezzanine classes." Meanwhile, the classes backed primarily by first-lien collateral face the "potential for significant future losses" that are expected to erode excess spread to the point that wouldn't cover anticipated losses, the rating agency said.

Counselors at the Homeowners' HOPE Hotline fielded nearly 60,000 calls in the third quarter, double the call volume in the previous quarter and more than a tenfold increase from that of a year earlier, according to the Minneapolis-based Homeownership Preservation Foundation.The hotline, which is dedicated to helping homeowners avoid foreclosure, offers personalized assistance with mortgage payment concerns. "Troubled homeowners are more aware of our services because of the intense media coverage surrounding the foreclosure crisis," said Colleen Hernandez, president and executive director of the foundation. The organization can be found online at http://www.995hope.org.

The housing market is deteriorating so quickly that credit assumptions made only a few months ago are now "unrealistic," and many banks and thrifts will likely have to hike their provisions for loan losses again, according to an analyst at Friedman, Billings, Ramsey.Washington Mutual "revised its provision for loan losses by $1 billion on two separate occasions over the last two months, and [WaMu] is not the only financial company that has revised its credit costs," an FBR equity research report says. In July, WaMu executives estimated that loss provisions would range from $1.5 billion to $1.7 billion this year. Now the giant Seattle thrift estimates that provisions will be in the $2.7 billion to $2.9 billion range. In reporting third-quarter results, WaMu increased its loan-loss reserve from $372 million to $967 million. The company also reported a 72% drop in earnings from a year ago. "We still believe there could be more upside to [WaMu's] provision levels, which would result in lower earnings estimates," the FBR report says. FBR can be found online at http://www.fbr.com.

NovaStar Financial Inc., Kansas City, Mo., has announced that the New York Stock Exchange has advised the company that NovaStar's common and preferred stock no longer meet the standards for continued listing on the NYSE due to a change in the company's corporate structure.NovaStar noted that it had announced a decision in September not to declare a dividend related to its 2006 taxable income, thereby terminating its status as a real estate investment trust retroactive to January 2006. The company now operates as a C corporation, requiring it to satisfy the NYSE's criteria for listing as a corporation. But the NYSE said NovaStar's current market capitalization and other factors do not meet the criteria, NovaStar reported. The company said it plans to request a review of the determination. NovaStar can be found on the Web at http://www.novastarmortgage.com.

Two classes of mortgage pass-through certificates issued by Impac Secured Assets Corp. in 2004 have been placed under review for possible downgrade by Moody's Investors Service.The affected securities were class B of series 2004-3 and class B of series 2004-4. Moody's also placed two classes from series 2004-1 on review for possible upgrade. The negative rating actions were based on an analysis of credit enhancement provided by subordination, overcollateralization, excess spread, and mortgage insurance relative to expected losses, Moody's said. Series 2004-3 and 2004-4 are backed by alternative-A adjustable-rate mortgage loans.

Five certificates issued by NovaStar Mortgage Funding Trust have been placed on review for possible downgrade by Moody's Investors Service.The affected securities were as follows: series 2004-1, classes B-2 and B-3; series 2004-2, classes B-2 and B-3; and series 2004-4, class B-3. The negative rating actions were based on an analysis of credit enhancement provided by subordination, overcollateralization, excess spread, and mortgage insurance relative to expected losses, Moody's said. The transaction is backed by subprime fixed- and adjustable-rate mortgage loans. Moody's can be found on the Web at http://www.moodys.com.

Eleven classes of mortgage pass-though certificates from four deals issued by GSAMP Trust in 2002 and 2004 have been placed on review for possible downgrade by Moody's Investors Service.The affected securities are as follows: series 2002-HE, class M-1, class M-2, class B-1, and class B-2; series 2004-HE1, class B-2 and class B-1; series 2004-HE2, class B-4; and series 2004-SEA2, class M-2, class M-3, class M-4, and class M-5. The negative rating actions were attributed to analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to expected losses. GSAMP Trust 2002-HE, 2004-HE1, and 2004-HE2 are backed by subprime fixed- and adjustable-rate mortgage loans. GSAMP Trust 2004-SEA2 is backed by subprime fixed-rate seasoned mortgage loans.