1st Union HEL Class Downgraded

Class B of First Union HEL mortgage pass-through certificates, series 1997-3, has been downgraded from BB to B by Fitch Ratings.The downgrade reflects the fact that poor collateral performance has reduced credit enhancement in the form of overcollateralization, the rating agency said. The transaction consists of 15-year fixed-rate mortgages extended to subprime borrowers. "Over the last six months, the monthly average in realized losses (after the application of excess interest) is approximately $75,000," Fitch said. "The high percentage of loans more than 60 days delinquent (approximately 25% of the current pool) suggests continued poor performance." The rating agency can be found on the Web at http://www.fitchratings.com.