Servicing

Two classes of CWALT 2006-43CB mortgage-backed securities have been placed on Rating Watch Negative by Fitch Ratings.The affected securities are classes III-B-3 and III-B-4. Fitch also affirmed the ratings on 10 classes from the transaction. The negative rating actions were based on "the relationship of serious delinquency" to credit enhancement, the rating agency said.

The class D notes and the preference shares of Trainer Wortham First Republic CBO III Ltd., a collateralized debt obligation consisting partly of residential and commercial mortgage-backed securities, have been placed on Rating Watch Negative by Fitch Ratings.In addition to residential and commercial MBS, the CDO consists of asset-backed securities, corporate debt, and other CDOs. The move was attributed to the fact that approximately 8.8% of the underlying portfolio collateral has been downgraded since the rating agency's last review in April.

Classes 2B-4 and 2B-5 of IndyMac MBS Inc. Residential Asset Securitization Trust, series 2004-A2 group 2, have been placed on Rating Watch Negative by Fitch Ratings.In addition, Fitch affirmed the ratings on seven other classes in groups 1 and 2 of the transaction. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Two classes of Credit Suisse's CSMC series 2006-7 mortgage-backed deal have been downgraded by Fitch Ratings, and one has been placed on Rating Watch Negative.Class DB-8 of groups 6-12 was downgraded from BB to B-plus, and class DB-9 was downgraded from B to C/DR4. Class DB-7 was placed on Rating Watch Negative. In addition, the ratings on 14 other classes in the deal were affirmed. The negative rating actions were attributed to a deteriorating relationship between credit enhancement and expected losses. The collateral consists of first-lien, fixed-rate alternative-A mortgage loans.

Two classes of Structured Asset Securities Corp. mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: Structured Adjustable Rate Mortgage series 2004-11, class B4, from B to CC/DR3, and class B5, from C/DR5 to C/DR6. In addition, classes B4-II and B5-II of SARM series 2006-12 group 2 and class IB5 of SASCO Lehman Mortgage Trust series 2006-6 group 1 were placed on Rating Watch Negative. Fitch also affirmed the ratings on 34 classes in four transactions. Fitch attributed the negative rating actions to a deterioration in the relationship between loss expectations and credit enhancement.

Three classes from two Residential Accredit Loans Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 2003-QS23, class B-1, from BB to B and placed on Rating Watch Negative, and class B-2, from B to CC/DR4; and series 2005-QS12, class B-2, from B to C/DR4. Fitch also placed class B-1 of series 2005-QS12, class B-2 of series 2006-QS11, and classes B-1 and B-2 of series 2006-QS15 on Rating Watch Negative. In addition, Fitch affirmed the ratings on 17 classes in the four deals. The negative rating actions were attributed to a deteriorating relationship between credit enhancement and expected losses. The underlying collateral consists primarily of alternative-A, first-lien residential mortgage loans. Fitch can be found online at http://www.fitchratings.com.

Forty-five classes backed by closed-end second-lien collateral in 14 securitizations from nine issuers have been downgraded by Standard & Poor's Ratings Services, as well as 11 subprime classes in nine deals from three issuers.Of the closed-end second-lien classes, 27 were placed on CreditWatch with negative implications, 12 were left on CreditWatch negative, and six were removed from CreditWatch negative, S&P reported. Of the subprime classes, five were placed on CreditWatch negative, four remain on CreditWatch, and two were removed from CreditWatch. In addition, the ratings on 46 other classes (from 11 issuers) backed by closed-end second-lien collateral were placed on CreditWatch negative, as were 31 other classes (from 15 issuers) backed by subprime collateral. S&P said the downgrades and CreditWatch placements "reflect early signs of poor performance of the collateral backing these transactions." For the closed-end second-lien transactions, the percentage of severely delinquent (90-plus days, foreclosure, and real estate owned) loans in the pools ranges from 3.30% to 18.20% of the current pool balances, S&P reported. For the subprime transactions, the comparable percentages range from 5.27% to 17.06%. The rating agency can be found online at http://www.standardandpoors.com.

NeighborWorks America and The Ad Council have launched a new public awareness campaign to help prevent foreclosures by urging struggling homeowners to call for assistance (888-995-HOPE.)"More than one million families will probably face foreclosure this year," said Ken Wade, chief executive officer of NeighborWorks. "Research tells us that more than half of these families will go into foreclosure without ever having any contact with their lender or a financial counselor who could probably help them." The ads will begin airing in July. Homeowners will be encouraged to contact their servicer to discuss their financial options. Solutions will range from establishing a repayment plan to finding a way to exit the mortgage responsibly without going through foreclosure.

Fannie Mae bought $66.38 billion in mortgages during May, a 26% increase from the level reported for the previous month.Compared with those of the same month last year, the government-sponsored enterprise's purchases were essentially flat. Its gross mortgage portfolio grew to $718.2 billion, a 1% increase from that of May but down from that of a year earlier ($733.8 billion). With lenders tightening their loan menus, Fannie Mae and Freddie Mac are expected to see their market share increase in the months ahead. Fannie Mae can be found online at http://www.fanniemae.com.

A new Freddie Mac subprime purchase program in development for release this summer is expected to support prepayment penalties, but in a more consumer-friendly manner than in the past, according to a presentation at the National Association of Mortgage Brokers annual convention in Seattle.The program, which Freddie has been testing with five or six lenders, will be in line with the government-sponsored enterprise's new restrictions on certain nontraditional mortgage purchases set to take effect Sept. 1, said Charles Coulter, vice president of sourcing strategies and solutions at Freddie Mac. When asked for further details, he said he could not be much more specific about the program because it is "still in development." However, when asked about prepayment penalties, he said the planned move down the credit curve is expected to support them, but would never allow them to go beyond the fixed period of the loans carrying them. Freddie Mac can be found online at http://www.freddiemac.com.