Fitch Rates SBMS VII Sovereign Bank Mortgage Loan Trust 2002-1.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 26, 2002

Salomon Brothers Mortgage Securities (SBMS) VII, Inc. Sovereign Bank Mortgage Loan Trust, series 2002-1 $532 million residential variable-rate mortgage pass-through certificates, classes A-1 through A-4 are rated 'AAA' by Fitch Ratings. In addition, Fitch rates class B-1 ($18 million) 'AA', class B-2 ($4.8 million) 'A', class B-3 ($2.8 million) 'BBB', class B-4 ($2.8 million) 'BB' and class B-5 ($1.7 million) 'B'.

The 'AAA' rating on the class A senior certificates reflects the 5.75% subordination provided by the 3.20% privately offered class B-1, the 0.85% privately offered class B-2, the 0.50% privately offered class B-3, the 0.50% privately offered class B-4, the 0.30% privately offered class B-5, and the 0.40% privately offered class B-6 (not rated by Fitch). Classes B-1, B-2, B-3, B-4, and B-5 are rated based on their respective subordination.

Fitch believes the amount of credit enhancement will be sufficient to cover credit losses, including limited bankruptcy, fraud, and special hazard losses. The ratings also reflect the quality of the underlying collateral and Fitch's confidence in the integrity of the legal and financial structure of the transaction.

The mortgage pool consists of four loan groups of fully amortizing, adjustable-rate mortgage loans. The four loan groups are cross-collateralized.

Group 1 consists of loans that will have their next adjustment date within 17 months of the closing date. The group has an aggregate principal balance of approximately $170,093,388 as of the cut-off date and a weighted average remaining term to maturity of 271 months. The average outstanding principal balance is $130,240. The weighted average amortized loan-to-value ratio (ALTV) for the mortgage loans is approximately 65.36%. The states that represent the largest portion of mortgage loans are PA (41.39%) and NJ (28.75%)

Group 2 consists of loans that will have their next adjustment date between 18 and 36 months of the closing date. The group has an aggregate principal balance of approximately $64,990,806 as of the cut-off date and a weighted average remaining term to maturity of 329 months. The average outstanding principal balance is $188,927. The weighted average ALTV for the mortgage loans is approximately 70.71%. The states that represent the largest portion of mortgage loans are PA (28.38%),NJ (27.83%), and MA (13.79%).

Group 3 consists of loans that will have their next adjustment date 37 months or more following the closing date. The group has an aggregate principal balance of approximately $243,556,241 as of the cut-off date and a weighted average remaining term to maturity of 350 months. The average outstanding principal balance is $204,497. The weighted average ALTV for the mortgage loans is approximately 76.94%. The states that represent the largest portion of mortgage loans are NJ (23.43%), MA (22.46%), PA (20.71%), and CT (10.57%).

Group 4 has an aggregate principal balance of approximately $85,864,027 as of the cut-off date and a weighted average remaining term to maturity of 290 months. The average outstanding principal balance is $127,206. The weighted average ALTV for the mortgage loans is approximately 72.48%. The states that represent the largest portion of mortgage loans are PA (53.28%), and NJ (24.27%).

SBMS VII, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, an election will be made to treat the trust as a real estate mortgage investment conduit (REMIC). U.S. Bank National Association will act as trustee.