Two tranches from Structured Asset Mortgage Investments II Trust series 2006-AR3 have been downgraded by Moody's Investors Service.Class II-B-2 was downgraded from A2 to Baa1, and class II-B-3 was downgraded from Baa2 to B1. The downgrades were attributed to higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels. The collateral classes consists primarily of first-lien, adjustable-rate alternative-A mortgage loans.

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