Fitch Upgrades Specialized Loan Servicing's U.S. RMBS Servicer Ratings; Assigns Stable Outlook

Fitch Upgrades Specialized Loan Servicing's U.S. RMBS Servicer Ratings; Assigns Stable Outlook | Bild: © ad-hoc-news

--U.S. Residential primary servicer rating for Alt-A product upgraded to 'RPS2' from 'RPS2-';

--U.S. Residential primary servicer rating for subprime product upgraded to 'RPS2' from 'RPS2-';

--U.S. Residential primary servicer rating for second lien product upgraded to 'RPS2' from 'RPS2-';

--U.S. Residential primary servicer rating for HELOC product upgraded to 'RPS2' from 'RPS2-';

--U.S. Residential primary servicer rating for special servicing upgraded to 'RSS2' from 'RSS2-'.

The Rating Outlook for SLS's servicer ratings is Stable, however, Fitch maintains its Negative Outlook for the entire U.S. Residential Mortgage Servicer ratings sector.

The rating actions are based on SLS's improved financial condition, and focused control environment, including its strong foreclosure processes and oversight. The ratings also take into account SLS's highly integrated technology platform, including its sophisticated investor management tools, and its solid career development programs. Finally, the ratings reflect Fitch's overall concerns for the U.S. residential servicing industry, which include the ability to maintain high performance standards while addressing the rising cost of servicing and changes to industry practices, which are likely to be mandated by regulators and other parties.

The ratings were determined in accordance with Fitch's criteria 'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria' and 'Global Rating Criteria for Structured Finance Servicers' which are available on the Fitch Ratings web site at 'www.fitchratings.com'.

In November 2011, SLS announced that it had been acquired from its former parent, Shinsei Bank, by Computershare (Australian Securities Exchange: CPU). Founded in 1978, Computershare is an international data management, high volume transaction processing, payments and stakeholder engagement business. Computershare is represented in all major financial markets and has over 10,000 employees worldwide.

SLS is headquartered in Highlands Ranch, CO. As of Aug. 31, 2011, SLS serviced 217,500 loans with an unpaid principle balance of $16.5 billion, which was composed of 32% HELOC, 28% second lien loans, 6% subprime loans, and 3% Alt-A loans with the remaining loans being non-performing and charged off loans.

In November 2010, Fitch assigned a Negative Outlook for the entire U.S. Residential Mortgage Servicer ratings sector on increased concerns surrounding alleged procedural defects in the judicial foreclosure process, as well as other concerns for servicer's operational risks.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's report 'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated Jan. 31, 2011, which is available on the Fitch Ratings web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Rating Criteria for Structured Finance Servicers' (Aug. 13, 2010);

--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating' (Jan. 31, 2011).

Applicable Criteria and Related Research:

Global Rating Criteria for Structured Finance Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547305

U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065

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