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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

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Rating Action:

Moody's takes action on $196 Million of Scratch and Dent RMBS issued by Countrywide

19 May 2011

New York, May 19, 2011 -- Moody's Investors Service has downgraded the ratings of 17 tranches and confirmed the ratings of one tranche from seven deals issued by Countrywide. The collateral backing these deals primarily consists of first-lien, fixed and adjustable rate "scratch and dent" residential mortgages.

Scratch and Dent deals are classified outside of our primary categorizations (Prime Jumbo, Subprime, Option ARMs and Alt-A) for a number of reasons. The pools may include mortgages that have been originated outside an originator's program guidelines in some way, or mortgages where borrowers missed payments in the past. These pools may also include loans with document defects at origination that were since rectified. Due to the varied content of Scratch and Dent mortgage pools, which can range from seasoned prime-like loans to non-prime loans that were seriously delinquent at the time of securitization, credit quality of these pools varies considerably.

RATINGS RATIONALE

The actions are a result of deteriorating performance of Scratch and Dent pools under stressed housing and macroeconomic conditions. The actions reflect Moody's updated loss expectations on Scratch and Dent pools.

The principal methodology used in these ratings is described in the Monitoring and Performance Review section in "Moody's Approach to Rating US Residential Mortgage-Backed Securities" published in December 2008. Other methodologies used include "US RMBS Surveillance Methodology for Scratch and Dent" published in May 2011, which accounts for the deteriorating performance and outlook.

Moody's final rating actions are based on current levels of credit enhancement, collateral performance and updated pool-level loss expectations. Moody's took into account credit enhancement provided by seniority, cross-collateralization, excess spread, time tranching, and other structural features within the senior note waterfalls.

The primary source of assumption uncertainty is the current macroeconomic environment, in which unemployment levels remain high, and weakness persists in the housing market. Overall, Moody's assumes a further 5% decline in home prices with stabilization in late 2011, accompanied by continued stress in national employment levels through that timeframe.

For more information please see www.moodys.com.

Moody's Investors Service received and took into account one or more third party due diligence reports on the underlying assets or financial instruments in this transaction and the due diligence reports had a neutral impact on the rating.

Complete rating actions are as follows:

Issuer: Countrywide Home Loan Trust 2003-SD2

Cl. A-1, Downgraded to Aa3 (sf); previously on Jul 16, 2003 Assigned Aaa (sf)

Cl. A-2, Downgraded to A1 (sf); previously on Jul 16, 2003 Assigned Aaa (sf)

Cl. M-1, Downgraded to Caa1 (sf); previously on Nov 18, 2010 Aa2 (sf) Placed Under Review for Possible Downgrade

Cl. M-2, Downgraded to Ca (sf); previously on Nov 18, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade

Cl. B-1, Downgraded to Ca (sf); previously on Apr 24, 2009 Downgraded to Caa3 (sf)

Issuer: Countrywide Home Loan Trust 2003-SD3

Cl. M-2, Downgraded to Baa2 (sf); previously on Oct 20, 2003 Assigned A2 (sf)

Cl. B-1, Downgraded to Caa3 (sf); previously on Nov 18, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade

Issuer: Countrywide Home Loan Trust 2004-SD1

Cl. A-1, Downgraded to A1 (sf); previously on Feb 12, 2004 Assigned Aaa (sf)

Cl. A-2, Downgraded to A2 (sf); previously on Feb 12, 2004 Assigned Aaa (sf)

Cl. M-1, Downgraded to B3 (sf); previously on Nov 18, 2010 Aa3 (sf) Placed Under Review for Possible Downgrade

Cl. M-2, Downgraded to Caa3 (sf); previously on Nov 18, 2010 Baa2 (sf) Placed Under Review for Possible Downgrade

Cl. B-1, Downgraded to Ca (sf); previously on Nov 18, 2010 B1 (sf) Placed Under Review for Possible Downgrade

Issuer: Countrywide Home Loan Trust 2004-SD2

Cl. M-1, Downgraded to Baa2 (sf); previously on Nov 18, 2010 Aa3 (sf) Placed Under Review for Possible Downgrade

Cl. M-2, Downgraded to Caa2 (sf); previously on Apr 24, 2009 Downgraded to Baa2 (sf)

Cl. B-1, Downgraded to Ca (sf); previously on Nov 18, 2010 B3 (sf) Placed Under Review for Possible DowngradeIssuer: CWABS Asset-Backed Certificates Trust 2006-QH2

Issuer: CWABS Asset-Backed Certificates Trust 2006-QH2

Cl. A-1-A, Confirmed at Caa2 (sf); previously on Nov 18, 2010 Caa2 (sf) Placed Under Review for Possible Downgrade

Issuer: CWABS Asset-Backed Certificates Trust 2007-QH1

Cl. A-1, Downgraded to B3 (sf); previously on Nov 18, 2010 B2 (sf) Placed Under Review for Possible Downgrade

Issuer: CWABS Asset-Backed Certificates Trust 2007-QX1

Cl. A-1, Downgraded to Caa3 (sf); previously on Nov 18, 2010 Caa2 (sf) Placed Under Review for Possible Downgrade

A list of these actions including CUSIP identifiers may be found at:

Excel: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF244552

A list of updated estimated pool losses and sensitivity analysis is being posted on an ongoing basis for the duration of this review period and may be found at:

Excel: http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF247004

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

New York
Qiuzi Huang
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Amita Shrivastava
Vice President - Senior Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's takes action on $196 Million of Scratch and Dent RMBS issued by Countrywide
No Related Data.
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