Four classes of certificates issued in four transactions by Aames Mortgage Trust in 2001 have been downgraded by Moody's Investors Service.The downgrades were as follows: series 2001-1, class B, from Baa2 to Ba2; series 2001-2, class M-2, from A2 to Baa1, and class B, from Baa2 to B2 (remains under review for downgrade); and series 2001-3, class B, from Baa2 to Ba1. Moody's also confirmed the ratings on three classes of Aames certificates. The transactions are backed mostly by first-lien, fixed-rate subprime mortgage loans originated by Aames Financial Corp. The rating agency attributed the downgrades to significant losses that have eroded overcollateralization. The class B certificates of the 2001-2 transaction will remain on watch for possible downgrade because high loss severities on the properties held for resale could impair their credit quality further, Moody's said.

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