Three tranches of mortgage-backed securities from Sequoia Alternative Loan Trust 2006-1 have been downgraded by Moody's Investors Service. The downgrades were as follows: class B-1, from Aa3 to B2 (and placed under review for possible further downgrade); class B-2, from B1 to Ca; and class B-3, from Caa2 to Ca. In addition, class A-2 was placed on review for possible downgrade. The negative rating actions were generally based on higher-than-expected rates of delinquency, foreclosure, and real estate owned in the underlying collateral relative to credit enhancement levels, Moody's said. The collateral consists primarily of first-lien, adjustable-rate, alternative-A mortgage loans.
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