Class M-3 of Residential Accredit Loans Inc., series 2004-QA2, has been downgraded from Baa2 to Ba1 by Moody's Investors Service.The downgrade was attributed to "relatively low" credit enhancement levels in light of expected losses. "The excess spread has significantly declined due to the high percentage of hybrid collateral. .... As a result, the deteriorating overcollateralization amount is causing the subordinate tranches to be more vulnerable to defaults. The underlying collateral consists of alternative-A, first-lien, adjustable-rate residential mortgage loans. The rating agency can be found online at http://www.moodys.com.

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