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Fifteen classes from three subprime mortgage-backed securities issued by New Century Home Equity Loan Trust have been downgraded by Fitch Ratings. Fitch also affirmed the ratings on classes with outstanding balances of $501 million.

Twenty-two classes from seven subprime mortgage-backed securities issued by Aegis Mortgage Corp. Asset Backed Securities Trust have been downgraded by Fitch Ratings. Fitch also affirmed the ratings on classes with outstanding balances of $556 million. Fitch can be found online at http://www.fitchratings.com.

Sixty-eight classes in five commercial real estate CDOs from various issuers have been downgraded by Fitch Ratings and removed from Rating Watch Negative. The affected collateralized debt obligations were as follows: 17 classes from ACAS CRE CDO 2007-1 Ltd./LLC; 15 classes from Ansonia CDO 2006-1 Ltd./LLC; 14 classes from JER CRE CDO 2006-2 Ltd./LLC; 12 classes from LNR CDO V series 2007-1 Ltd./LLC; and 10 classes from LNR CDO VI series 2007-2 Ltd./LLC. The deals are backed primarily by B-pieces of commercial mortgage-backed securities, as well as the debt of real estate investment trusts (in the Ansonia deal) and commercial real estate loans (in the JER deal). The rating agency said it believes investment-grade CMBS "will perform well even in a heightened stress environment," but that the risks facing first-loss and junior-rated bonds in CMBS have risen along with expectations of an increase in commercial real estate defaults. Fitch can be found online at http://www.fitchratings.com.

The sales of existing single-family detached homes in California were down 24.5% in March from the level recorded a year earlier, according to the California Association of Realtors. The seasonally adjusted annualized rate of closed-escrow resales totaled 318,830 in March, down from the 422,300-unit rate recorded in March 2007, CAR reported. The median price of an existing single-family detached home in California totaled $413,980 in March, down 29% from a revised $582,930 a year earlier, the association said. "Both tighter underwriting standards and the ongoing effects of the credit/liquidity crunch continue to constrain sales," said CAR vice president and chief economist Leslie Appleton-Young. "Historically, mortgage rates on jumbo loans are 0.2% to 0.4% higher than those on conforming loans, but the spreads in recent weeks have been as large as 2 percentage points, reflecting an increase in the perceived risk associated with these loans." CAR can be found online at http://www.car.org.

Bank of America, Charlotte, N.C., has announced plans to modify or work out at least $40 billion in troubled mortgages over the next two years and to expand its 10-year community development goal to $1.5 trillion. Both goals assume the successful completion of BoA's proposed merger with Countrywide Financial Corp., slated for the third quarter. BoA also said it will locate the companies' combined national mortgage operations under the BoA name in Countrywide's Calabasas, Calif. headquarters. "We believe the financial strength, security, and stability of the combined company will allow us to enable people to buy homes and stay in homes, and to assist many of those affected by the current mortgage troubles," said Liam McGee, BoA's president of global consumer and small business banking, in testimony at a Federal Reserve Board hearing in Los Angeles on the merger. The $1.5 trillion community development goal will focus on affordable housing, economic development, and consumer and small-business lending. BoA can be found on the Web at http://www.bankofamerica.com.

Over 9% of securitized subprime loans were 90 days or more past due in February, 11% were in foreclosure, and over 6% were real estate owned, according to a Friedman Billings Ramsey Investment Management report. Overall the default rate on subprime loans stood at 26.6% in February, up from 25.2% in the previous month. Only 60% of subprime borrowers are current on their loans. The default rate on private-label securitized alternative-A mortgages jumped to 9.3% in February, up 103 basis points from the previous month's level. Of these alt-A mortgages, 3% were 90 days or more past due and 4.35% were in foreclosure. "We continue to expect default rates ... to rise persistently in 2008," said FBRIM managing director Michael Youngblood. Mr. Youngblood said he expects the default rate on securitized subprime loans to hit 30.3% by year's end. (The default rate includes loans 90 days or more past due, in foreclosure, and REO.)

Servicers provided nearly 503,000 loan workouts for homeowners in the first quarter, bringing to nearly 1.4 million the total number of workouts since the Hope Now alliance was created last July. Of the 502,500 prime and subprime loan workouts that servicers provided to homeowners during the first quarter, about 323,000 were repayment plans and 179,500 were loan modifications. The Hope Now alliance said that among subprime mortgage loans, loan modifications accounted for 44% of workouts in the first quarter, double the 2007 rate. Some consumer advocates say that modifications, in which loan terms are changed, are a better long-term solution than repayment plans that attempt to bring a borrower current over a shorter-term period.

The Census Bureau has reported that the inventory of vacant homes listed for sale rose to 2.3 million in first quarter, up 4.6% from that of the previous quarter, and that the homeownership rate was unchanged. Listings of vacant homes rose dramatically in 2006 to 2.1 million, and this overhang on the real estate market continues to exert downward pressure on house prices. Since 2006 it has remained above the 2 million mark, and over the past two quarters there has been an uptick in listings -- probably reflecting bank sales of more foreclosed properties. The Census Bureau report also indicates that the homeownership rate held steady at 67.8% in the first quarter. However, the rate is down from 68.4% in the first quarter of 2007. The homeownership rate for blacks fell from 47.7% in the fourth quarter to 47.1% in the first quarter, while the rate for Hispanics rose from 48.5% to 48.9%.

Ten classes of Anthracite 2006-HY3 Ltd./Corp., a commercial real estate collateralized debt obligation, have been downgraded by Fitch Ratings and removed from Rating Watch Negative. The deal is backed primarily by B-pieces of commercial mortgage-backed securities. The downgrades were based on losses and projected losses to the collateral, Fitch said. The rating agency said it believes investment-grade CMBS "will perform well even in a heightened stress environment," but that the risks facing first-loss and junior-rated bonds in CMBS have risen along with expectations of an increase in commercial real estate defaults.

Ten classes of G-Force CDO 2006-1, a commercial real estate collateralized debt obligation, have been downgraded by Fitch Ratings and removed from Rating Watch Negative. Fitch also affirmed the ratings on three other classes in the transaction, which is backed primarily by B-pieces of commercial mortgage-backed securities. "In reviewing CMBS Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral," the rating agency said. "The overall expected losses reflect the single-sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches."