Class M-3 of FNBA Mortgage Loan Trust 2004-AR1 has been downgraded from Baa2 to B1 by Moody's Investors Service.The downgrade was attributed to credit enhancement levels that were deemed to be low given the projected losses on the underlying pool. "The pool of mortgages has seen a spike in losses in recent months, and future losses could cause a more significant erosion of the overcollateralization," Moody's said. The transaction consists of alternative-A, first-lien, hybrid adjustable-rate loans originated by First National Bank of Nevada.

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