Quickly following behind S&P’s market bombshell earlier today, Moody’s announced late this afternoon that it has dropped ratings on 399 RMBS classes representing roughly $5 billion worth of face value. (Hat tip Housing Doom). Most are mezzanine and below:

Moody’s Investors Service today announced negative rating actions on 431 securities originated in 2006 and backed by subprime first lien mortgage loans. The negative rating actions affect securities with an original face value of over $5.2 billion, representing 1.2% of the dollar volume and 6.8% of the securities rated by Moody’s in 2006 that were backed by subprime first lien loans. Of the 431 rating actions taken today, Moody’s downgraded 399 securities and placed an additional 32 securities on review for possible downgrade….

The downgrades hit 42% of the Ba class and 19% of the Baa classes rated by Moody’s in 2006 (that’s BB and BBB to most of the bond markets) — an astounding number, even if it’s not surprising to see Moody’s quickly follow S&P’s lead here. What is surprising, however, is that Moody’s has actually gone one step further and chopped down the ratings, instead of just warning that a drop in ratings is imminent. That means losses, folks — real actual money-eating losses — for investors unlucky enough to be holding the wrong bag on this. And here’s a market bombshell for you:

Moody’s analysis shows that the transactions backed by collateral originated by Fremont Investment & Loan, Long Beach Mortgage Company, New Century Mortgage Corporation and WMC Mortgage Corp. have been performing below the average of the 2006 vintage and represent about 60% of the rating actions taken today.

Anyone surprised to see WaMu’s subprime unit on this list? How about GE’s subprime unit?