DBRS, a Toronto-based rating agency, has downgraded 202 classes from 40 residential mortgage-backed securities transactions. Citing a "significant increase in serious delinquencies," DBRS said excess spread for the classes backed chiefly by first-lien collateral is not expected to be sufficient to cover anticipated losses. The downgrades of classes backed by second-lien collateral reflect "rapid deterioration in credit enhancement" resulting from a significant increase in collateral delinquencies and losses, the rating agency said. "Overcollateralization has been depleted in many transactions, and excess spread continues to diminish," DBRS said. "Additionally, in many cases, subordinate classes have already been impaired, further weakening the available credit support for the remaining senior and mezzanine classes."

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