Due to pressure on Rite Aid Corp.'s ratings, Standard & Poor's Ratings Group has placed three CMBS issues on CreditWatch - Negative. The Rite Aid collateral is approximately 20.6% of the outstanding loan balances of the Merrill Lynch Mortgage Investors Inc. mortgage passthrough certificate series 1998-C1-CTL (MLMI-98CTL), 8.3% of Bear Stearns Commercial Securities I commercial loan pass-through certificates series 1999 CLF1 (BSCMSI-99CLF) and 7.5% of the NationsLink Funding Corp. commercial loan passthrough certificate series 1999-LTL-1 (NLFC-99LTL-1). This situation will continue to be monitored by Standard & Poor's on any effect it may have on other CMBS transactions.

Moody's Investors Service has upgraded the ratings on four classes of Western Federal Saving and Loan Association Series 1991-1 and 1991-2 residential MBS. After nine years of seasoning, the jumbo A loans, which had been performing as below-average subprime loans, has shown a significant slowdown in the rate of loss and positive delinquency trends. Due to prepayments, the pool size has been reduced and made the class sufficient to support a higher rating level.

Delta Funding Corp. has reached an agreement with New York state authorities, yet the ratings on the MBS issued by Delta will remain unchanged. This comes weeks after the New York State Attorney General's office filed a civil rights lawsuit against Delta, saying that the company was giving low-income residents illegal high-interest mortgages. Delta will soon provide Standard & Poor's with a listing of all loans flagged when the information becomes available, and Delta will also establish a remediation fund, to which $7.25 million will be committed in the form of monthly payment reductions of the mortgages. The payment reductions will be amortized over the remaining term of the mortgages, and should not bear a burden to Delta.

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