Four classes of First Horizon Home Loan Mortgage Trust mortgage-backed securities have been downgraded by Fitch Ratings and three classes have been placed on Rating Watch Negative.The downgrades were as follows: series 2006-AA3, class B4, from BB to B-plus, and class B5, from B to CCC/DR1; and series 2006-FA2, class B4, from BB to B-plus, and class B5, from B to CCC/DR2. Class B3 of series 2006-AA3 and classes B3 and B4 of series 2006-FA2 were placed on Rating Watch Negative. The negative rating actions were attributed to deterioration in the relationship between credit enhancement and expected losses. The collateral for the transactions consists of conventional fixed- and adjustable-rate mortgages secured by first liens on residential properties. Fitch can be found online at http://www.fitchratings.com.

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