Servicing

The rating on class A-5 of Asset Securitization Corp.'s commercial mortgage pass-through certificates series 1995-MD IV has been revised from Rating Watch Negative to Rating Watch Evolving by Fitch Ratings.In addition, class B-1 was placed on Rating Watch Evolving and the ratings on five other classes of the same series were affirmed. Fitch attributed the revision from Rating Watch Negative to the upcoming maturity of the largest of the two remaining loans in the pool. Although class A-5 has unpaid interest shortfalls, the rating agency said it expects the shortfalls to be fully recovered. Fitch can be found online at http://www.fitchratings.com.

Four certificates from Renaissance Home Equity Loan Trust deals issued in 2002 and 2003 have been placed under review for possible downgrade by Moody's Investors Service.The affected securities are: series 2002-1, classes M-2 and B; series 2002-4, class B; and series 2003-2, class M-4. In addition, nine classes were placed under review for possible upgrade. The negative rating actions were attributed to credit enhancement levels that are considered low given the projected losses on the underlying pools. The transactions consist of subprime, primarily first-lien, adjustable- and fixed-rate loans.

Two certificates from SG Mortgage Securities Trust 2006-FRE1 have been downgraded by Moody's Investors Service.Class M-10 was downgraded from Ba1 to Ba2, and class M-11 was downgraded from Ba2 to B2. The reason for the downgrades is that credit enhancement levels may be low given the projected losses on the underlying pools, Moody's said. The transaction " has built up a large delinquency pipeline of approximately 13% in foreclosure" and real estate owned compared with the available overcollateralization, according to the rating agency. The deal consists of subprime, primarily first-lien, adjustable- and fixed-rate loans.

Three classes from two Fremont Home Loan Trust deals issued in 2005 have been downgraded by Moody's Investors Service, and three classes from another deal have been has placed under review for possible downgrade.The downgrades were as follows: series 2005-1, class B-1, from Ba1 to Ba3, and class B-2, from Ba2 to B3; and series 2005-B, class M-11, from Ba1 to B2. Classes M-9, M-10, and M-11 of series 2006-B were placed on review, and Moody's confirmed the rating on one class from series 2005-1. The negative rating actions were attributed to credit enhancement levels (including excess spread) that are deemed too low in view of projected losses. The transactions are backed by first- and second-lien adjustable- and fixed-rate mortgage loans.

Seven classes of certificates from two deals issued by MASTR Asset Backed Securities Trust in 2006 have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2006-FRE1, class M-7, from Baa1 to Ba1, class M-8, from Baa2 to B3, and class M-9, from Baa3 to Caa3; and series 2006-FRE2, class M-8, from Baa2 to Ba2, class M-9, from Baa3 to B2, class M-10, from Ba1 to Caa1, and class M-11, from Ba2 to Caa3. The downgrades stemmed from credit enhancement levels (including excess spread) that are deemed too low in view of projected losses, Moody's said. The series 2006-FRE1 transaction is backed entirely by first lien adjustable- and fixed-rate subprime mortgage loans, while series 2006-FRE2 contains a small fraction (5.9% at closing) of second-lien subprime loans as well. Moody's can be found online at http://www.moodys.com.

New Century Financial Corp., the Irvine, Calif.-based subprime lender that filed for Chapter 11 bankruptcy protection in April, has announced that Carrington Capital Management LLC and an affiliate have submitted the highest bid, $188 million, for New Century's loan servicing platform.New Century said the purchase price was reached after an auction involving multiple bidders and represents an increase of approximately 35% from the $139 million initially offered by Carrington Capital and Carrington Mortgage Services LLC. A hearing for the approval of the sale is scheduled for May 21 by the Bankruptcy Court for the District of Delaware. More information about the bankruptcy case can be found online at http://www.ncenrestructuring.com.

Countrywide Financial Corp., Calabasas, Calif., has announced the sale of $4 billion of convertible bonds through a private placement and said it will use some of the proceeds to buy back up to 23 million shares of its common stock.On Thursday Countrywide's stock was the most actively traded on the New York Stock Exchange, rising 2% to $41.16, with 41 million shares changing hands by noon. (Its average daily volume is 11 million shares.) The bonds (debentures) were issued in two separate series, A and B, and are due in 30 years. The series A bonds have a conversion rate representing a 30% premium over Countrywide's close-of-day stock price on Wednesday ($40.33) while the B bonds carry a 45% premium. In unrelated news, Countrywide chairman Angelo Mozilo recently told analysts that he could not see the company being absorbed by a large bank, "as that could destroy the franchise value that had been created." The company can be found online at http://www.countrywide.com.

A new subprime product totally different from anything seen before will be created within six months, according to a panelist at the SourceMedia Nonprime Lending Symposium in Las Vegas.Tom Zimmerman, managing director and head of asset-backed securities research at UBS, said the industry needs to create a subprime product "that makes sense," noting that some think a product like the 2/28 adjustable-rate mortgage is not appropriate for people who already have problems making payments. Mr. Zimmerman also noted that we have gone from an era when early payment defaults were "unusual and unexpected" and less than 1% to a point where 6%-10% of all loans in packages are being put back for EPDs.

Fitch Ratings has announced the introduction of presale reports for U.S. subprime/home equity loan residential mortgage-backed securities.The reports, to be published before the sale of a new subprime RMBS transaction, will contain deal summary information and extensive collateral analysis. "Fitch's RMBS presale reports will provide investors with unprecedented detail on the drivers of each deal's default and loss risk," said Glenn Costello, managing director and co-head of Fitch's RMBS group. The presale reports will also contain comparisons to past transactions by the issuer and base-case expected-loss comparisons from Fitch's ResiLogic model. "By providing detailed comparisons of collateral attributes and ResiLogic model analytics, Fitch is providing investors with a powerful tool to analyze rapidly changing subprime risk," Mr. Costello said. The first RMBS presale report featured HSBC Home Equity Loan Trust (USA) 2007-2, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

Ten classes from seven Credit Suisse First Boston home equity securitizations have been downgraded by Fitch Ratings, and four have been placed on Rating Watch Negative.Fitch also affirmed the ratings on 87 classes in nine CSFB deals. The negative rating actions were attributed to a deterioration in the relationship between credit enhancement and loss expectations. "The 2005 vintage collateral pools have generally experienced faster-than-expected prepayments and earlier-than-expected losses," Fitch said. Fitch can be found on the Web at http://www.fitchratings.com.