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Two classes from two Ameriquest Mortgage Securities Inc. home equity issues have been downgraded and removed from Rating Watch Negative by Fitch Ratings.Class M2 of series 2002-C and class M-4 of series 2002-3 were downgraded from BBB-minus to B. In addition, Fitch affirmed the ratings on four classes from the two Ameriquest transactions. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses.

Three classes of Argent Securities Inc.'s ARSI series 2004-PW1 home equity issue have been downgraded and removed from Rating Watch Negative by Fitch Ratings.The downgrades were as follows: class M9, from BBB-minus to BB; class M10, from BB-plus to B-plus; and class M11, from BB to B. Fitch also affirmed the ratings on nine other classes from the transaction. The downgrades were attributed to a deterioration in the relationship between credit enhancement and expected losses. The transaction consists of loans originated or acquired by Argent Mortgage Co. or Olympus Mortgage Co., Fitch said.

Five classes from five Conseco/Green Tree home equity loan deals have been downgraded by Fitch Ratings.The downgrades were as follows: Green Tree Home Equity 1998-C, class B-2, from CCC/DR1 to CC/DR2; Green Tree Home Equity 1999-C, class B-2, from C/DR2 to C/DR6; Green Tree Home Equity 1999-D, class B-2, from CCC/DR1 to C/DR4; Conseco Home Equity 2001-B B2, class B-2, from BB to B-plus; and Conseco Home Equity 2001-D, class B-1, from BB-minus to B. In addition, Fitch upgraded 11 classes and affirmed the ratings on 54 other classes in 18 Conseco/Green Tree home equity and home improvement transactions. The downgrades were attributed to a deteriorating relationship between credit enhancement and expected losses. Fitch can be found online at http://www.fitchratings.com.

Six certificates from two ACE Securities Corp. Home Equity Loan Trust subprime mortgage deals have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2002-HE1, class M-2, from A2 to Baa1, class M-3, from Baa2 to B1, and class M-4, from Baa3 to B3; and series 2004-HE1, class M-5, from Baa2 to Baa3, class M-6, from Baa3 to Ba2, and class B, from Ba2 to Caa2. The downgrades were attributed to the weaker-than-expected performance of the mortgage collateral and the resulting erosion of credit support. "In both of the transactions, overcollateralization amounts are currently below their targets, and pipeline losses are likely to cause eventual depletion of the overcollateralization and losses on the most subordinate tranches," Moody's said. In addition, credit enhancement levels may be low given the projected losses on the underlying pools, according to the rating agency. Moody's can be found online at http://www.moodys.com.

Three certificates from First Franklin Mortgage Loan Trust series 2002-FF2 have been downgraded by Moody's Investors Service.The downgrades were as follows: class M-1, from Aa2 to A2; class M-2, from A2 to Ba1; and class M-3, from Baa1 to Ba2. Moody's said it downgraded the certificates because credit enhancement levels are low in view of projected losses on the underlying pools, and loss severities on liquidated loans are on the rise. The transaction consists of subprime first-lien mortgage loans originated by First Franklin Financial Corp. Moody's can be found online at http://www.moodys.com.

Class M of American Business Financial Services Mortgage Loan Trust series 2003-2 has been placed on Rating Watch Negative by Fitch Ratings.The rating agency also affirmed the rating on one other class in the deal. The Rating Watch placement was attributed to the fact that the payment of principal and interest is guaranteed by Radian Asset Assurance Inc., which has been assigned a negative outlook by the rating agency.

Class M of Bear Stearns Asset Backed Securities Inc. series 2003-ABF1 has been placed on Rating Watch Negative by Fitch Ratings.The rating agency also affirmed the rating on one other class in the deal. Fitch attributed the negative rating action to the fact that the payment of principal and interest is guaranteed by Radian Asset Assurance Inc., which has been assigned a negative outlook by the rating agency.

Three classes of notes issued by NYLIM Stratford CDO 2001-1 Ltd., a collateralized debt obligation partly composed of commercial and residential mortgage-backed securities, have been downgraded by Fitch Ratings.In addition, the ratings on one other class was affirmed. Fitch attributed the downgrades to continued deterioration in the credit quality of the collateral.

Three classes of Ace Securities Corp.'s asset backed pass-through certificates, series 2004-HE1, have been downgraded and removed from Rating Watch Negative by Fitch Ratings.The downgrades were as follows: class M-4, from BBB-plus to BBB; class M-5, from BBB to BB; and class M-6, from BBB-minus to BB-minus. In addition, Fitch affirmed the ratings on four classes in the deal. The downgrades were attributed to higher-than-expected monthly losses that have caused "significant deterioration" in the overcollateralization amount. Fitch said it expects the OC to be depleted within the next couple of months and that class B will start taking writedowns, putting classes M-4, M-5, and M-6 at greater risk. The mortgage pool consists of conventional first- and second lien residential mortgage loans on properties located chiefly in California, New York, and Florida. Fitch can be found on the Web at http://www.fitchratings.com.

The use of automated valuation models to assess the value of a home may no longer result in property value penalties, according to a new criteria report by Fitch Ratings. Under the new criteria, AVM review depends on individual lenders' processes and controls for using the models rather than the overall strength of the values in the regions the properties being valued are in, according to Fitch senior director Suzanne Mistretta. Going forward, Fitch "will discount property values by 5% or more if either a lender's usage processes and controls do not adequately mitigate overvaluation risk, or if a lender's processes are not disclosed to Fitch," she said. Previously, Fitch said it "would discount property values derived from an AVM assessment from 10%-15% in regional markets deemed 'weak' or 'soft.'" Fitch can be found on the Web at http://www.fitchratings.com.