Fitch Affirms Irwin Home Equity Resi Servicer Ratings.

NEW YORK -- Fitch Ratings affirms Irwin Home Equity Corporation's (IHE) 'RPS2' residential primary servicer ratings for home equity and high loan-to-value (HLTV) products. The primary ratings are based on the company's seasoned, experienced management team, effective loan administration procedures, and integrated technology.

IHE, located in San Ramon, CA, is a subsidiary of Irwin Union Bank and Trust, which in turn is a subsidiary of Irwin Financial Corporation, an Indiana bank holding company. Since 1995, IHE has serviced home equity loans, home equity lines of credit, and high loan-to-value loans. As of June 30, 2004, IHE serviced almost 59,000 loans totaling over $2.7 billion, of which $1.3 billion were home equity loans and home equity lines of credit (HELOC) and $1.4 billion were HLTV.

The company's growth has remained flat over the past three years due primarily to the counter-cyclical nature of its home equity portfolio in the current rate environment. To that end, IHE has seen significant improvements to its portfolio quality, based on earlier changes to its long-term business strategies, credit policies, and products, which have resulted in improved portfolio stability and loan performance. The company continues to source higher quality loans using Fair Isaac & Co. (FICO) scores, improved processes, and risk-based pricing.

During the review period, the company added an operational risk manager to focus on compliance and operational risk and to direct the company in process improvements aligned with expanded internal controls. Furthermore, IHE continues to make process improvements in its loan administration and default management units to facilitate streamlined processing and workflows and to reduce manual activities. The company continues to take a defensive stance to keep delinquencies stable, recognizing that potential increases in delinquent loans are likely in the current economic environment. Fitch will continue to monitor IHE's progress in effectively managing its performance, long-term growth, and operational initiatives within a tightened credit structure.

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, see Fitch's report 'Residential Mortgage Servicer Ratings,' dated Feb. 21, 2003, available on the Fitch Ratings web site at 'www.fitchratings.com'.