Downgrades for BofA (BAC) (MS) (GS)?

With Fitch Ratings saying it's ready to act soon, Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) could be downgraded quickly. Five European banks also face the same probable fate.

The banks mentioned were placed on "ratings watch negative" Thursday by Fitch, saying they're going to act soon.

Bank of America was tagged because of its continued heavy exposure to the housing market, which is worsening with the economy.

Also of concern for BofA is the numerous lawsuits filed against it recently related to mortgage-backed securities. It's different for the giant bank because of the size of the lawsuits, which with AIG is for $10 billion, and for Fannie Mae and Freddie Mac the securities are valued at $57.5 billion. A number of states continue to litigate against Bank of America as well.

Goldman's issues are in relationship to its reliance on revenue from trading and its wholesale funding.

Morgan Stanley generates concerns over the change in its business model to wealth management from investment banking.

Barclays PLC (NYSE:BCS), BNP Paribas, Societe Generale, Credit Suisse AG (NYSE:CS) and Deutsche Bank AG were the five international banks incurring a "ratings watch negative" from Fitch.

Separately, Fitch downgraded UBS AG (NYSE:UBS), Lloyds Banking Group PLC (NYSE:LYG) and Royal Bank of Scotland Group PLC (NYSE:RBS).