Amresco MBS Class Downgraded

Class B-1F of Amresco Residential Securities Corp. mortgage loan pass-through certificates, series 1998-3 group 1, has been downgraded from BB to C by Fitch Ratings.In addition, the downgraded class was assigned a DR4 Distressed Recovery rating and the ratings on two other classes from group 1 and four classes from group 2 were affirmed. The downgrade was due to a deterioration in the relationship of credit enhancement to loss expectations, Fitch said. The trust consists of a fixed-rate group (group 1) and an adjustable-rate group (group 2) in which the excess spread is cross-collateralized. "This feature has generally allowed for excess spread from the adjustable-rate group to help support the fixed-rated group," the rating agency said. "However, in the past 12 months group 2 has experienced several months of high losses, and any of the excess interest that was generated was needed to build its own overcollateralization."