Class B-5 of Terwin Mortgage Trust series 2004-EQR1 has been placed on Rating Watch Negative by Fitch Ratings.Fitch also affirmed the ratings on nine other classes in the transaction. The negative rating action was based on trends in overcollateralization stemming from "a reduction in the dollar amount of excess spread due to faster-than-expected prepayments and rising interest rates," Fitch said. The collateral for the transaction is fixed-rate subprime loans secured by second-lien mortgages on residential properties.

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