Standard & Poor's Ratings Services has announced downgrades of 1,413 classes of U.S. residential mortgage-backed securities (with an original par value of $22.0 billion) backed by first-lien subprime mortgage loans issued from the fourth quarter of 2005 through the fourth quarter of 2006.S&P also affirmed its ratings on securities representing $531.6 billion of original par value of such RMBS from the same period. S&P said the rating actions were based on expected further delinquencies and losses on the underlying loans, resulting reductions in credit support, and continued declines in home values. "While cumulative losses to date remain low, they have increased since our July 2007 review and we expect them to increase further," the rating agency said. For the downgraded transactions, overall delinquencies averaged 15.7% and serious delinquencies (loans that are delinquent by more than 90 days, in foreclosure, or real estate owned) averaged 23.3%, according to S&P. The rating agency said it expects the downgraded securities to be especially vulnerable to greater losses because 60%-70% of the loans backing them are subject to some type of payment adjustment in the near future. S&P can be found online at http://www.standardandpoors.com.

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