Fitch Affirms 49 and Upgrades 15 Classes from 19 Salomon Brothers RMBS Securitizations

Business Wire, Feb 7, 2006

NEW YORK -- Fitch has taken rating actions on the following Salomon Brothers Mortgage Securities VII, Inc. (SBMSI) transactions:

Series 1997-LB4:

-- Class M-3 upgraded to 'AA' from 'A'.

Series 1997-LB5:

-- Class M2 upgraded to 'AA' from 'A'.

Series 1997-LB6:

-- Class A affirmed at 'AAA';

-- Class B1 affirmed at 'AAA';

-- Class B2 affirmed at 'A'.

Series 1997-NC5:

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

-- Class M-2 upgraded to 'AA' from 'A'.

Series 1998-AQ1:

-- Class A affirmed at 'AAA';

-- Class B1 affirmed at 'AA'.

Series 1998-NC1:

-- Class A affirmed at 'AAA';

-- Class M1 upgraded to 'AA ' from 'AA';

-- Class M2 upgraded to 'AA-' from 'A'.

Series 1998-NC2:

-- Class M1 upgraded to 'AA ' from 'AA'.

Series 1998-NC3:

-- Class A affirmed at 'AAA';

-- Class M-1 upgraded to 'AA ' from 'AA';

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

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

Series 1998-NC4:

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

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

Series 1998-NC6:

-- Class A affirmed at 'AAA';

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

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

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

Series 1998-OPT1:

-- Class M-1 upgraded to 'AA ' from 'AA';

-- Class M-2 upgraded to 'AA-' from 'A'.

Series 1998-OPT2:

-- Class M-1 upgraded to 'AA ' from 'AA'.

Series 2001-1 Group 1:

-- Class A affirmed at 'AAA';

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

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

-- Class MF-3 remains at 'C'.

Series 2001-1 Group 2:

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

-- Class MV-1 upgraded to 'AA ' from 'AA';

-- Class MV-2 upgraded to 'AA-' from 'A';

-- Class MV-3 affirmed at 'A-';

-- Class MV-4 affirmed at 'BBB-'.

Series 2001-NC1:

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

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

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

Series 2001-NC2:

-- Class A affirmed at 'AAA';

-- Class M-1 upgraded to 'AAA' from 'AA ';

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

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

Series 2002-CIT1:

-- Class A affirmed at 'AAA';

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

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

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

-- Class M-4 affirmed at 'BBB';

-- Class M-5 affirmed at 'BBB-'.

Series 2002-WMC2:

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

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

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

Series 2003-UP1:

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

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

-- Class M-3 affirmed at 'A'.

The collateral on the aforementioned transactions consists of 30-year fixed- and adjustable-rate mortgages extended to subprime borrowers, secured by first and second liens on one- to four-family residential properties. The originators include New Century, Option One, Long Beach, The CIT Group, WMC Mortgage Corp., and Union Planters Bank. The servicers include Litton Loan Servicing LP (rated 'RPS1' by Fitch), Ocwen Financial Corp. ('RPS2'), Ameriquest Mortgage Co. ('RPS2 '), New Century Mortgage Corp. ('RPS3'), and Option One Mortgage Corp. ('RPS1').

The affirmations reflect credit enhancement consistent with future loss expectations, and affect approximately $267.77 million in outstanding certificates. The upgrades reflect an improvement in the relationship between credit enhancement and future loss expectations, and affect approximately $79.53 million in outstanding certificates. The upgrades in the 1997-1998 transactions are generally benefiting from excess spread greater than monthly losses and overcollateralization (OC) at, or near, the target amount. The OC target for all 1997-1998 transactions is at the floor amount and is expected to grow as a percentage of the declining pool balance. The upgrades in the 2001 vintage generally benefit from failed performance triggers which have required the sequential distribution of principal and have allowed for the growth of credit enhancement for the more senior bonds.

The securities are seasoned from a range of 33 to 101 months, and the pool factors (current collateral balance as a percentage of the initial collateral balance) range from 1% to 32%. The cumulative losses (total losses as a percentage of initial collateral balance) range from 0.77% (2003-UP1) to 6.67% (1998-NC4). The amount of collateral in the 60-plus delinquency buckets (as a percentage of current collateral balance and including foreclosure, real estate owned, and bankruptcy) ranges from 11.69% (1998-NC2) to 47.69% (1998-NC4).

For more information concerning transaction-based statistics, delinquency information, or collateral attributes visit 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.