Fitch Downgrades & Places Countrywide Home Loans' Servicer Rtgs on Rating Watch Evolving.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has downgraded Countrywide Home Loans, Inc.'s (CHL CHL crown-heel length. ) servicer ratings as follows: --Residential primary servicer rating for Alt-A product to 'RPS1-' from 'RPS1'; --Residential primary servicer rating for Subprime product to 'RPS1-' from 'RPS1'; --Residential primary servicer rating for HE/HELOC product to 'RPS1-' from 'RPS1'; --Residential special servicer rating to 'RSS1-' from 'RSS1'. --Residential master servicer rating to 'RMS2+' from 'RMS1-'. Fitch has affirmed CHL's primary servicer rating for prime product at 'RPS1'. Fitch has also placed the servicer ratings on Rating Watch Evolving. Fitch recently completed its operational review which confirmed that CHL's servicing operations continue to perform at a level consistent with the prior year. However, the rating actions reflect the corporate ratings of CHL, and its parent, Countrywide Financial Countrywide Financial Corporation (NYSE: CFC) is a diversified financial marketing and service holding company engaged primarily in residential mortgage banking and related businesses. Corp., whose senior debt was recently downgraded by Fitch to 'BBB+' from 'A' and placed on Rating Watch Evolving. The rating actions also reflect the continued pressure on CHL's liquidity position and financial flexibility in the increasingly challenged residential mortgage market and its potential impact on CHL's loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. operations. A company's financial condition is an important component of Fitch's servicer rating analysis. The financial condition is not as large a component of the servicer rating for prime product, which resulted in the affirmation for this product. Fitch determined during its review that CHL's primary, special, and master servicing operations continue to perform well as a result of the company's experienced management team, sophisticated servicing technology, vertical integration strategy, and comprehensive risk management practices. CHL has eight servicing facilities located in Simi Valley Simi Valley (sē`mē, sĭm`ē), city (1990 pop. 100,217), Ventura co., SW Calif. in an oil, fruit, and farm region; laid out 1887, inc. 1969. and Lancaster, CA: Plano, Fort Worth, and Richardson, TX; Tempe, AZ, and Mumbai and Hyderabad, India. As of March 31, 2007, CHL's servicing portfolio consisted of over 8.4 million loans totaling over $1.35 trillion, an increase from 7.5 million loans totaling over $1.13 trillion as of February 28, 2006. CHL continues to use its network of vertically integrated residential mortgage-related businesses to perform traditional vendor services and to invest in servicing technology, most of which the company has developed in-house. Since Fitch's prior review, CHL enhanced its FOCUS foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. timeline management system to capture delay information via electronic business partner communication, initiated an electronic data interchange See EDI. (application, communications) electronic data interchange - (EDI) The exchange of standardised document forms between computer systems for business use. EDI is part of electronic commerce. (EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. ) with mortgage insurance companies, and improved payment posting with multi-thread processing. CHL also implemented an application to make product specific information automatically available on customer service representative's desktops, and enhanced its interactive voice response unit (IVR (Interactive Voice Response) An automated telephone information system that speaks to the caller with a combination of fixed voice menus and data extracted from databases in real time. ) to incorporate new customer-friendly speech applications, allowing customers to speak interactively to transact An earlier e-commerce system for the Web from Open Market that included order capture and secure order fulfillment using credit cards, ecash and other payment systems. It included customer service and subscription administration capabilities as well as an integrated database for reporting business. The new IVR technology is intended to address more complex transactions, such as providing insurance policy information or making commitments to pay on delinquent loans, which may result in increased automation opportunities and usage. Fitch has reviewed the company's servicing operations and believes that CHL has the appropriate staff, default procedures, and controls in place to manage its initiatives while maintaining performance. Fitch will continue to closely monitor CHL's financial condition and its ability to maintain current servicing performance levels and portfolio performance in a rising delinquency environment. The Rating Watch Evolving indicates that the servicer ratings could be upgraded, remain the same, or be downgraded, depending upon the stability of the servicers' portfolios, operational capabilities, and financial condition. For more information on the impact of financial condition on Fitch's servicer ratings, please see Fitch's report 'Impact of Financial Condition on U.S. Residential Mortgage Servicer Ratings' dated March 26, 2007, which is available on the Fitch Ratings web site at www.fitchratings.com. 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 Mortgage Servicers', dated Nov. 29, 2006, which is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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