Classes M-4 and M-5 of Ace Securities Corp.'s asset backed pass-through certificates, series 2004-HS1, have been placed on Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on four other classes in the transaction. The negative rating actions were attributed to higher-than-expected monthly losses that have exceeded the available excess spread in recent months, causing a deterioration in the overcollateralization amount. "In addition, cumulative loss and 60-or-more-days delinquency percentages (0.80% and 27.51%, respectively) for this transaction are significantly higher than the industry average (approximately 0.56% and 13.19%, respectively)," Fitch said. The pool consists of first-lien residential mortgage loans.
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