American Home MBS Classes Downgraded

Eight tranches from two mortgage-backed securities deals issued by American Home in 2007 have been downgraded by Moody's Investors Service. The downgrades were as follows: American Home Mortgage Assets Trust, series 2007-3, class I-M-1, from Aa2 to Baa3 (and placed on review for possible further downgrade), class I-M-2, from A2 to Caa1, class I-M-3, from Baa3 to Ca, class II-M-3, from A2 to B3, class II-M-4, from A3 to Caa1, class II-M-5, from Baa2 to Caa2, class II-M-6, from Baa3 to Caa3; and series 2007-2, class I-M-2, from A3 to Baa2. In addition, nine tranches from three deals have been placed under review for possible downgrade. The negative rating actions were based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, fixed- and adjustable-rate alternative-A mortgage loans.