American Mortgage News

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken rating action on the following First Franklin Financial Corporation residential mortgage-backed certificates:

Series 2004-FFH1

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 is rated 'A' and placed on Rating Watch Negative;

--Class M-6 is rated 'A-' and placed on Watch Negative;

--Class M-7 downgraded to 'BB+' from 'BBB+';

--Class M-8 downgraded to 'B+' from 'BB';

--Class M-9 downgraded to 'C/DR4' from 'BB-'.

Series 2004-FFH2

--Class A-1 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'BBB+';

--Class M-8 affirmed at 'BBB';

--Class M-9 is rated 'BBB-' and placed on Watch Negative;

--Class B-1 downgraded to 'B+' from 'BB+';

--Class B-2 downgraded to 'CC/DR2' from 'BB'.

Series 2004-FFH3

--Classes I-A-1, I-A-2, II-A-1, II-A-3, and II-A-4 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'BBB+';

--Class M-8 is rated 'BBB' and placed on Watch Negative;

--Class M-9 downgraded to 'BB-' from 'BBB-';

--Class B-1 downgraded to 'B+' from 'BB+'.

Series 2004-FFH4

--Classes I-A-1, II-A-2, and II-A-3 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'BBB+';

--Class M-8 affirmed at 'BBB+';

--Class M-9 is rated 'BBB' and placed on Watch Negative;

--Class M-10 is rated 'BBB' and placed on Watch Negative;

--Class M-11 downgraded to 'BB-' from 'BBB-';

--Class B-1 downgraded to 'B+' from 'BB'.

Series 2005-FFH1

--Classes A-1A, A-1B, A-2B, & A-2C affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class B-1 affirmed at 'BBB+';

--Class B-2 affirmed at 'BBB';

--Class B-3 affirmed at 'BBB-';

--Class B-4 affirmed at 'BB+'.

Series 2005-FFH2

--Classes A-1, A-2, & A-3 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'BBB+';

--Class M-8 affirmed at 'BBB';

--Class M-9 affirmed at 'BBB-';

--Class B-1 affirmed at 'BB+';

--Class B-2 affirmed at 'BB'.

Series 2005-FFH3

--Classes I-A-1, II-A-2, & II-A-3 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'BBB+';

--Class M-8 affirmed at 'BBB';

--Class M-9 affirmed at 'BBB';

--Class M-10 affirmed at 'BBB-';

--Class B-1 affirmed at 'BB+';

--Class B-2 affirmed at 'BB';

--Class B-3 affirmed at 'BB-';

--Class B-4 affirmed at 'B+'.

Series 2005-FFH4

--Classes I-A-1 & II-A-1 through II-A-4 affirmed at 'AAA';

--Class M-1 affirmed at 'AA+';

--Class M-2 affirmed at 'AA';

--Class M-3 affirmed at 'AA-';

--Class M-4 affirmed at 'A+';

--Class M-5 affirmed at 'A';

--Class M-6 affirmed at 'A-';

--Class M-7 affirmed at 'A-';

--Class M-8 affirmed at 'BBB+';

--Class M-9 affirmed at 'BBB';

--Class M-10 affirmed at 'BB+';

--Class B-1 affirmed at 'BB+';

--Class B-2 affirmed at 'BB';

--Class B-3 affirmed at 'BB'.

The affirmations, affecting approximately $3.1 billion of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. The downgrades, affecting approximately $92.4 million of the outstanding certificates, are taken as a result of a deteriorating relationship between credit enhancement and expected loss. In addition, the Rating Watch Negative affects $77.1 million of the outstanding certificates.

The negative rating actions on the above transactions are primarily the result of losses exceeding excess spread for at least seven of the past nine months and, as a result, eroding the overcollateralization (OC) below target. For series 2004-FFH1 and series 2004-FFH2, the most subordinate bond is downgraded to a distressed recovery rating because Fitch expects the OC to be depleted within the next 6-18 month. After the OC is depleted, the most subordinate bonds will begin to be written down because of collateral losses.

The collateral of the above transactions consists of fixed-rate and adjustable-rate subprime mortgage loans secured by first-liens on residential properties. In addition, a majority of the loans had original loan-to-values over 80%. All of the loans were originated or acquired by First Franklin Financial Corp. Also, the loans collateralizing the above transactions are serviced by either HomEq Servicing Corp. ('RPS1'), Saxon Mortgage Inc. ('RPS2+'), Select Portfolio Servicing ('RPS2'), Wilshire Credit Corp. ('RPS1'), or National City Home Loan Services ('RPS2').

The pool factors for the above transactions range from 15% (2004-FFH1) to 78% (2005-FFH4). The seasoning ranges from 14 months (2005-FFH4) to 35 months (2004-FFH1). Further information regarding current delinquencies, losses and credit enhancement is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.