Fitch Affirms 40 Classes from FirstPlus Homeowner Loan Trusts.

NEW YORK -- Fitch Ratings has removed from Rating Watch Evolving and affirms the following classes from FirstPlus Homeowner Loan Trusts:

Series 1997-2

--Class A-9 affirmed at 'AAA';

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

--Class M-2 affirmed at

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

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

Series 1997-3

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1997-4

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1998-1

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1998-2

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1998-3

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1998-4

--Class A-8 affirmed at 'AAA';

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

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

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

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

Series 1998-5

--Class A-9 affirmed at 'AAA';

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

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

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

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

The trusts consist primarily of closed-end, junior-lien mortgages with loan-to-value ratios greater than 100% at issuance. The loans were originated or acquired by FirstPlus Financial, Inc. (FirstPlus). FirstPlus was a consumer finance company, which focused on high-loan-to-value second mortgage loans, but filed for bankruptcy on March 5, 1999 and has since been liquidated. On April 1, 2000, the servicing of the loans was transferred to Countrywide Home Loans, Inc. (Countrywide). Countrywide is rated 'RPS1' by Fitch.

Over the past several years, the trustee has notified bondholders of multiple class action lawsuits against the trusts in various states. The class actions have been brought by residents of the various states who are borrowers of second mortgage loans that collateralize the trusts. The plaintiffs allege that the originators of the mortgage loans charged fees and rates of interest exceeding the amounts allowed under consumer protection statutes. The plaintiffs seek recovery of the alleged excess payments and other damages from the trusts and judgments to rescind or reduce their mortgage loan obligations on mortgages held by the trusts.

The trustee, U.S. Bank N.A., has entered into a settlement agreement on behalf of the trusts to settle the claims in the majority of the class actions. The payment of the settlement is being funded exclusively by distributions otherwise payable to the holders of the residual interests in the trusts, all of whom have approved the settlement. The settlement does not require payments to be made out of any other assets of the trusts or out of distributions to any other class of securities.

However, Fitch is unable to predict the outcome of the remaining outstanding litigation or quantify the risk to the bondholders. Consequently, the rating actions above do not address the potential risk of bondholder loss due to the outstanding lawsuit.

The loan performance of the transactions is stable. The credit enhancement percentage for all classes in each transaction has doubled to their respective target amounts, and monthly losses are consistently covered by the available excess spread. The overcollateralization amount in several of the transactions is at, or near, its floor amount and is expected to grow as a percentage of the declining pool balance.

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.