Four classes of Ace Securities Corp. mortgage-backed securities have been downgraded by Fitch Ratings, and three classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2002-HE3, class M-2, from A to BBB (and removed from Rating Watch Negative), and class M-3, from BB to B; and series 2004-HE1, class M-5, from BB to B-plus, and class M-6, from BB-minus to B. The securities placed on rating watch were class B-2 of series 2005-HE2, class B-2 of series 2005-HE3, and class B-1 of series 2005-RM2. In addition, the rating agency affirmed the ratings on 55 other classes from six transactions. Fitch said the negative rating actions were taken because monthly losses have generally exceeded the available excess spread in recent months, causing a deterioration in the amount of overcollateralization. The rating agency can be found on the Web at http://www.fitchratings.com.

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