Twenty-six classes totaling $1.2 billion from two subprime issues of Ace pass-through certificates have been downgraded by Fitch Ratings. In addition, Fitch affirmed the ratings on Ace classes totaling $250 million. The downgrades were based on changes to Fitch's subprime loss forecasting assumptions that the rating agency says "better capture the deteriorating performance of pools from 2007, 2006, and late 2005 with regard to continued poor loan performance and home price weakness." The collateral for the transactions, both issued in 2006, consists of first-lien subprime mortgage loans.

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