Moody's Investors Service has downgraded the servicer quality rating of EMC Mortgage Corp. as a primary servicer of subprime residential mortgage loans from SQ1 to SQ1-minus.Moody's also affirmed EMC's SQ2 rating as a primary servicer of prime residential mortgages (including alternative-A), its SQ2 rating as a primary servicer of second-lien residential mortgages, and its SQ2-plus rating as a special servicer. The downgrade was prompted by "the high level of volatility that has been experienced in the subprime market as well as a reduction from strong to above average in Moody's assessment of the company's foreclosure and REO timeline management," the rating agency said. EMC is a wholly owned subsidiary of The Bear Stearns Cos. Its servicing operations are based in Lewisville, Texas. Moody's can be found online at http://www.moodys.com.

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