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.

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