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Two classes of certificates from Meritage Mortgage Loan Trust 2004-1 have been placed on review for possible downgrade by Moody's Investors Service.The class M-8 and B-1 notes are backed by average subprime collateral, consisting primarily of adjustable-rate mortgages, the rating agency said. Moody's said it will assess "whether rate resets and resulting prepayments may have contributed to the deterioration in credit quality of the pool in the past year, resulting in higher-than-expected projected tail-end losses."

Class M-2 of Terwin Mortgage Trust 2004-EQR1 has been downgraded from A2 to Ba1 by Moody's Investors Service.The downgrade was attributed to low credit enhancement levels vis-a-vis current loss projections. "This transaction is not performing as anticipated due to the rising loss severities, delinquency rates, and realized losses," Moody's said. The underlying collateral consists of nonperforming, fixed- and adjustable-rate, first-lien residential mortgage loans.

Two classes from Morgan Stanley ABS Capital I Inc., series 2002-HE3, have been downgraded by Moody's Investors Service.Class B-1 was downgraded from Baa2 to B1, and class B-2 was downgraded from Baa3 to B3. The downgrades were based on credit enhancement levels that are low in view of loss projections, Moody's said. "The overcollateralization amount is declining far below its required level due to the rising loss severities and realized losses," the rating agency said. The collateral consists of fixed- and adjustable-rate first-lien residential mortgage loans.

Five classes of GSAMP Trust series 2006-S3 mortgage-backed securities have been placed under review for possible downgrade by Moody's Investors Service.The affected certificates are classes M-5, M-6, M-7, B-1, and B-2. Moody's said the actions were taken because credit enhancement is low given the projected losses on the underlying pool. "The pool of mortgages has seen a spike in losses in recent months with high loss severity," the rating agency said. The transaction consists of subprime second-lien fixed-rate loans.

Class M-5 of Homestar Mortgage Acceptance Corp. asset-backed pass-through certificates, series 2004-3, has been downgraded from Baa2 to Ba3 by Moody's Investors Service.The downgrade was based on deteriorating credit enhancement, the rating agency said. "While the collateral is performing better than expected, the overcollateralization has consistently been falling below its target as a result of lower-than-expected excess spread levels," Moody's reported. The deal is backed by Homestar-originated collateral consisting primarily of alternative-A loans, with a small percentage of subprime loans.

Class DB3 of CSFB Mortgage Securities Corp. mortgage pass-through certificates, series 2002-22 (groups 3 and 4), has been downgraded from B to C/DR6 by Fitch Ratings.Fitch also affirmed the ratings on 59 classes from 16 CSFB issues. The downgrade was attributed to the deterioration of credit enhancement relative to monthly losses.

Two classes of Residential Accredit Loan Inc. mortgage pass-through certificates have been downgraded by Fitch Ratings.Class B-2 of series 2004-QS6 was downgraded from B to C/DR4, and class B-2 of series 2004-QS9 was downgraded from B to C/DR4. In addition, Fitch upgraded nine classes in three RALI transactions and affirmed the ratings on 160 classes in 36 RALI deals. Fitch attributed the downgrades to high delinquencies and losses. The loans in the securitizations consist of 15- and 30-year fixed-rate mortgages extended to prime and alternative-A borrowers, primarily on one- to four-family residential properties. Fitch can be found online at http://www.fitchratings.com.

Two certificates from Reperforming Loan REMIC Trust Certificates series 2003-R4 have been downgraded by Moody's Investors Service.Class B-3 was downgraded from Ba2 to B2, and class B-4 was downgraded from B2 to Ca. Moody's also confirmed the rating on class B-2 of the transaction. The downgrades were attributed to credit enhancement levels that are low in view of projected losses on the underlying pools. The transaction consists of securitizations of reperforming loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, virtually all of which were repurchased from Ginnie Mae pools. "Frequencies of loans into default appear to be significant for FHA/VA collateral, causing erosion in credit support," Moody's said. The rating agency can be found online at http://www.moodys.com.

Six classes of SACO I Trust second-lien mortgage-backed securities have been downgraded by Fitch Ratings, and four classes have been removed from Rating Watch Negative.The downgrades were as follows: class B-3 of series 2005-1, from BB to B and removed from Rating Watch Negative; class B-3 of series 2005-2, from BBB-minus to BB-minus and removed from Rating Watch Negative; class B-4 of series 2005-2, from B to CCC and assigned a Distressed Recovery rating of DR3; class B-3 of series 2005-3, from BB to B-plus and removed from Rating Watch Negative; class B-4 of series 2005-4, from BB to B and removed from Rating Watch Negative; and class B-5 of series 2005-WM1, from BB to B. The downgrades reflect a decline in overcollateralization stemming from losses associated with the mortgage pools as well as reduced excess spread resulting from "much faster-than-expected prepayments and rising interest rates," the rating agency said. Fitch can be found online at http://www.fitchratings.com.

Class B-4 of Structured Asset Securities Corp. residential mortgage-backed certificates, series 2003-7H, has been downgraded from BB to B by Fitch Ratings.In addition, Fitch affirmed the ratings on 38 classes from seven SASCO securitizations. The downgrade was attributed to cumulative pool losses and high delinquency levels. The rating agency can be found on the Web at http://www.fitchratings.com.