Fitch Places NovaStar's Subprime Servicer Rating on Rating Watch Negative.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 placed NovaStar Mortgage, Inc.'s (NovaStar) 'RPS3+' residential primary servicer rating for subprime product and 'RSS3+' special servicer rating on Rating Watch Negative. NovaStar is a subsidiary of NovaStar Financial Inc. (NFI NFI Nasjonal Forskningsinformasjon (Norwegian Research Database) NFI National Fisheries Institute NFI National Fatherhood Initiative NFI National Forest Inventory (Australia) NFI Nutrition Foundation of India ). The Rating Watch reflects the increasingly challenging operating environment in the subprime mortgage market, specifically the significant disruption in the secondary mortgage market and the resultant decline in liquidity. On Aug. 17, 2007, NovaStar announced it was temporarily stepping back from originating loans in the wholesale market and laying off approximately 500 workers which represents 37% of the company's workforce. Previously, on July 16, 2007, after exploring a full range of strategic options, NovaStar announced it had entered into a definitive securities purchase agreement, standby purchase agreement, and other agreements with MassMutual Capital Partners LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and Jefferies Capital Partners IV LLC in an effort to raise $150 million in capital. Fitch does not formally rate the credit or financial strength of NovaStar or its parent, NFI. However, a company's financial condition is an important component of Fitch's servicer rating process. Fitch believes NFI's financial flexibility is under significant strain, similar to many other independent seller/servicers. Fitch will monitor developments including NFI's current efforts to raise capital, its corporate restructuring efforts, and results from its decision to revoke the company's REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). status. Fitch has rated 13 residential mortgage-backed securities (RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities ) transactions collateralized by Novastar originated mortgage loans. All of the transactions are serviced by NovaStar. The servicer Rating Watch will not have a direct immediate impact on the ratings of the NovaStar serviced transactions. Fitch will continue to closely monitor the performance of the NovaStar serviced transactions. Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some 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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