Fitch Downgrades Ace MBS Classes

Two classes of Ace Securities Corp. series 1999-LB2 mortgage-backed securities have been downgraded by Fitch Ratings.Class M-2 was downgraded from A to A-minus, and class B was downgraded from BBB to BBB-minus. In addition, Fitch affirmed the ratings on 13 classes from five Ace Securities deals and upgraded three classes. The rating agency said the downgrades resulted from higher-than-expected collateral losses and a deteriorating relationship between loss expectations and credit support. "Losses have exceeded excess spread in five out of the last six distribution dates, resulting in a decline of [overcollateralization] to $1.85 million, below its target of $2.08 million," Fitch said. The pool consists of adjustable- and fixed-rate, first-lien residential subprime mortgage loans.