SURF MBS Classes Downgraded

Ten tranches from three Specialty Underwriting and Residential Finance Trust deals issued in 2003 have been downgraded by Moody's Investors Service.Although the losses on the deals -- series 2003-BC1, series 2003-BC2, and series 2003-BC3 -- fall within original expectations, the downgrades are based on recent and expected pool losses and the resulting actual and expected erosion of credit support, Moody's said. Overcollateralization in series 2003-BC1 and 2003-BC2 has been fully depleted, and the class B-2 certificates are realizing losses. "In addition, the overcollateralization amount in the 2003-BC1 transaction is significantly below its floor, and pipeline losses are likely to cause further erosion of the overcollateralization," the rating agency said. The collateral consists of first-lien residential mortgage loans.