Servicing

Class B of Mesa Trust 2001-2 has been downgraded from B3 to Caa3 by Moody's Investors Service.The action was based on an analysis of the credit enhancement provided by subordination, overcollateralization, and excess spread relative to the expected loss, Moody's said. The transaction is backed by first- and second-lien fixed- and adjustable-rate subprime mortgage loans.

Two classes of Finance America Mortgage Loan Trust series 2004-2 have been downgraded by Fitch Ratings, and two classes from series 2004-1 have been placed on Rating Watch Negative.Class M-8 of series 2004-2 was downgraded from BBB to BBB-minus, and class M-9 was downgraded from BBB-minus to BB-minus. Classes M-7 and M-8 of series 2004-1 were placed on Rating Watch Negative. In addition, Fitch upgraded one class and affirmed the ratings on 13 other classes in the two deals. Fitch attributed the downgrades to deterioration in the relationship between credit enhancement and expected losses.

Two classes of Terwin Mortgage Trust mortgage-backed securities have been downgraded by Moody's Investors Service, and five classes have been placed under review for possible downgrade.Class B-6 of Terwin Mortgage Trust series 2006-2HGS was downgraded from B1 to Caa3, and class B-7 was downgraded from Caa3 to C. Classes B-3, B-4, and B-5 of the same transaction were placed under review for possible downgrade, as were classes B-4 and B-5 of Terwin Mortgage Trust series 2006-4SL. The negative rating actions were attributed to losses that have eroded subordination and caused credit enhancement to fall too low to support the existing ratings. Moody's can be found online at http://www.moodys.com.

Three classes of Structured Asset Securities Corp. residential mortgage-backed certificates have been downgraded by Fitch Ratings.The downgrades were as follows: series 1999-SP1 pools 1, 2, and 3, class B, from BBB to BB-plus; series 2002-BC1, class M3, from CCC/DR2 to CC/DR2; and series 2002-HF2, class B2, from B to CC/DR2. In addition, the Distressed Recovery rating of series 2003-BC2 class B2 was changed from DR6 to DR2. Fitch also upgraded two SASCO classes and affirmed the ratings on 49 classes from 15 SASCO deals. Fitch attributed the downgrades to deterioration in the relationship between credit enhancement and expected losses.

Twenty-five classes from nine Structured Asset Securities Corp. Amortizing Residential Collateral Trust transactions have been downgraded by Fitch Ratings.Fitch also affirmed the ratings on 29 classes from 11 SASCO ARC deals. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations.

Twenty-nine classes from 10 Credit Suisse First Boston home equity securitizations have been downgraded by Fitch Ratings.In addition, the ratings on 97 classes from 18 CSFB deals have been affirmed. The downgrades were attributed to a deterioration in the relationship between credit enhancement and loss expectations. The rating agency said the collateral backing the transactions consists of first- and second-lien fixed- and adjustable-rate subprime mortgage loans.

Fifty-eight classes from 15 Structured Asset Investment Loan Trust mortgage pass-through certificates have been downgraded by Fitch Ratings.In addition, Fitch affirmed the ratings on more than 100 classes from 23 SAIL transactions. The rating agency attributed the downgrades to a deterioration in the relationship between credit enhancement and expected losses. The collateral in the deals consists primarily of conventional fixed- and adjustable-rate, fully amortizing and balloon, first- and second-lien residential mortgage loans. Fitch can be found on the Web at http://www.fitchratings.com.

Countrywide Financial Corp. Calabasas, Calif., is creating a new 15-person unit in Calabasas to review the entire company's processes from top to bottom, one mortgage executive familiar with the matter has told MortgageWire.The executive, requesting anonymity, said: "They are going to review everything." He added that, "All businesses will be looked at to see if they are doing things the right way." At deadline time, a company spokeswoman had not returned telephone calls about the matter. According to the Quarterly Data Report, Countrywide is the nation's largest 'A' paper lender and the third-largest subprime funder.

The Homeownership Preservation Foundation, Minneapolis, has reported a "significant jump" in the number of homeowners calling its 888-995-HOPE hotline for assistance in avoiding foreclosure.The national hotline, which helps borrowers who are behind on their mortgage payments, received more than 14,000 calls in the first quarter, a 30% increase from the total received in the fourth quarter, the foundation said. (More than 25,000 homeowners called the hotline in all of 2006.) "Currently, more than 300 homeowners call 888-995-HOPE daily," said Colleen Hernandez, president and executive director of the foundation. "The increase in the number of calls is a direct result of the rising number of homeowners suddenly finding themselves in the position of potentially losing their homes, combined with the growing awareness of the hotline as a result of a nationwide public service campaign." More information on the hotline can be found on the Web at http://www.995hope.org, and the foundation can be found at http://www.hpfonline.com.

Rising subprime mortgage defaults threaten to exacerbate an oversupply of housing inventory, according to a new report published by Standard & Poor's Ratings Services.The recently published article, "Credit FAQ: How Subprime Woes Might Affect Rated Homebuilders," addresses the potential effect of the subprime situation on homebuilders' captive finance subsidiaries, the glut of unsold homes, and other "hot-button" issues. "We haven't taken any rating actions on homebuilders solely because of the subprime issue," said credit analyst James Fielding. "However, rising foreclosure rates and tightening consumer credit raise additional red flags regarding a cyclical housing downturn that is already deeper and broader than previously anticipated. What's more, the duration of this downturn will be a function of how well the economy, and job growth, holds up over the next year, since it is the steady absorption of excess housing supply that will lead to eventual stabilization." S&P can be found online at http://www.standardandpoors.com.