Long Beach MBS Classes Downgraded

Eight classes from four issues of subprime Long Beach Mortgage Loan Trust residential mortgage-backed securities have been downgraded by Fitch Ratings.The downgrades were as follows: series 2001-4 group 1, class I-M2, from BB to CCC; series 2001-4 group 2, class II-M1, from AA-minus to A-minus, and class II-M2, from BB to CCC; series 2003-1, class M-4, from BBB-minus to BB-minus; series 2003-2, class M-4, from BBB-plus to BBB, and class M-5, from BBB to BBB-minus; and series 2003-3, class M-3, from BBB to BBB-minus, and class M-4, from BBB-minus to BB-minus. The downgraded classes from series 2003-1, 2003-2, and 2003-3 were removed from Rating Watch Negative. Fitch also affirmed the ratings on 20 classes from five Long Beach transactions, and removed class M-3 of series 2003-1 and class M-6 of series 2003-4 from Rating Watch Negative. The downgrades were attributed to continued deterioration in the relationship between credit enhancement and loss expectations. "Of particular note, the performance of these transactions has also been adversely affected by a growing concentration of loans secured with manufactured homes," Fitch said.