Fitch Takes Various Rating Actions on 16 RALI RMBS Securitizations

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken action on the following Residential Accredit Loan, Inc. (RALI) mortgage-pass through certificates:

Series 2001-QS18

--Class A affirmed at 'AAA';

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

--Class M-2 upgraded to 'AA+' from 'AA';

--Class M-3 upgraded to 'A' from 'BBB';

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

--Class B-2 downgraded to 'CCC' from 'B' and assigned a distressed recovery (DR) rating of 'DR2'.

Series 2003-QS5

--Class A affirmed at 'AAA'

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

--Class M-2 affirmed at 'A+';

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

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

--Class B-2 downgraded to 'CCC' from 'B' and assigned a DR rating of 'DR2'.

Series 2005-QS4

--Class A affirmed at 'AAA';

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

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

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

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

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR4'.

Series 2005-QS8

--Class A affirmed at 'AAA';

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

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

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

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

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

Series 2005-QS14 Group I

--Class IA affirmed at 'AAA';

--Class IM-1 affirmed at 'AA';

--Class IM-2 affirmed at 'A';

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

--Class IB-1 is rated 'BB' and placed on Rating Watch Negative;

--Class IB-2 downgraded to 'CC' from 'B' and assigned a DR rating of 'DR3'.

Series 2005-QS14 Group II

--Class IIA affirmed at 'AAA';

Series 2005-QS15

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 is rated 'B' and placed on Rating Watch Negative.

Series 2005-QS16

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 is rated 'B' and placed on Rating Watch Negative.

Series 2006-QS1

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS2 Group I

--Class IA affirmed at 'AAA';

--Class IM-1 affirmed at 'AA';

--Class IM-2 affirmed at 'A';

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

--Class IB-1 is rated 'BB' and placed on Rating Watch Negative;

--Class IB-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS2 Group II

--Class IIA affirmed at 'AAA';

--Class IIM-1 affirmed at 'AA';

--Class IIM-2 affirmed at 'A';

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

--Class IIB-1 affirmed at 'BB';

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

Series 2006-QS3

--Class A affirmed at 'AAA';

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

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

--Class M-3 is rated 'BBB' and placed on Rating Watch Negative;

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

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS4

--Class A affirmed at 'AAA';

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

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

--Class M-3 is rated 'BBB' and placed on Rating Watch Negative;

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

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS5

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS6 Group I

--Class IA affirmed at 'AAA';

--Class IM-1 affirmed at 'AA';

--Class IM-2 affirmed at 'A';

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

--Class IB-1 is rated 'BB' and placed on Rating Watch Negative;

--Class IB-2 is rated 'B' and placed on Rating Watch Negative.

Series 2006-QS6 Group II

--Class IIA affirmed at 'AAA';

--Class IIM-1 affirmed at 'AA';

--Class IIM-2 affirmed at 'A';

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

--Class IIB-1 affirmed at 'BB';

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

Series 2006-QS7

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS8

--Class A affirmed at 'AAA';

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

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

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

--Class B-1 is rated 'BB' and placed on Rating Watch Negative;

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

Series 2006-QS9

--Class A affirmed at 'AAA';

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

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

--Class M-3 is rated 'BBB' and placed on Rating Watch Negative;

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

--Class B-2 downgraded to 'C' from 'B' and assigned a DR rating of 'DR5'.

The affirmations, affecting approximately $6.7 billion of the outstanding certificates, reflect a stable relationship between credit enhancement (CE) and expected loss. The upgrades, affecting approximately $4.1 million of the outstanding certificates, reflect an improving relationship between CE and expected loss. The downgrades, affecting approximately $36.1 million, reflect a deteriorating relationship between CE and expected losses. The Rating Watch Negative affects approximately $41.3 million of the outstanding certificates.

The negative rating actions on the 2005 and 2006 vintage RALI transactions are because of current trends in the relationship between serious delinquency (DQ) and credit enhancement. The 90+ DQ (including loans in bankruptcy, foreclosure, and REO) for transactions with negative rating actions ranges from 0.79% (series 2005-QS14 Pool 1) to 3.58% (series 2006-QS3) of the current collateral balance.

Series 2001-QS18, class B-2 is downgraded because of high delinquencies and losses. To date, the transaction has experienced losses of approximately $1.2 million or 0.33% of the original collateral balance. The 90+ DQ (including loans in bankruptcy, foreclosure, and REO) is 4.86% of the current collateral balance, while the current CE for the B-2 bond is 0.50%.

Series 2003-QS5, class B-2 is also downgraded because of high delinquencies and losses. The 90+ DQ (including loans in bankruptcy, foreclosure, and REO) is 0.58% of the current collateral balance. To date, the transaction has experienced losses of approximately $223,000 or 0.09% of the original collateral balance. Losses have deteriorated the CE for the B-2 bond from 0.15% at issuance to 0.12% currently.

The collateral of the above transactions primarily consists of 30-year and 15-year fixed-rate mortgage loans extended to Alt-A borrowers. The loans are primarily secured by first liens on one- to four-family residential properties. All of the above transactions are master serviced by GMAC-RFC, (rated 'RMS1' by Fitch).

As of the April 2007 distribution date, the pool factors (current principal balance as a percentage of original) of the above transactions range from 7% (series 2001-QS18) to 86% (series 2006-QS8 & 2006-QS9). The seasoning ranges from 9 months (series 2006-QS8 & 2006-QS9) to 64 months (series 2001-QS18).

Fitch will continue to monitor the above transactions. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. For more information on Distressed Recovery ratings, see the full report ('Structured Finance Distressed Recovery Ratings'), which 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.