Fitch Ratings Upgrades First Horizon Home Loans' Primary Servicer To 'RPS2'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 12, 2002

Fitch Ratings upgrades First Horizon Home Loan Corporation's (First Horizon) residential primary servicer rating for prime mortgage loans to 'RPS2' from 'RPS3+'. The rating is based on First Horizon's historical performance in servicing prime loans, experienced management team, solid collateral performance, effective loan administration procedures and integrated technology. The rating also reflects the financial strength of First Horizon's immediate parent, First Tennessee Bank National Association, as well as the stability and longstanding reputation of its ultimate parent, First Tennessee National Corporation, both of which are rated 'A' by Fitch for long-term debt.

First Horizon has been a residential mortgage originator and servicer for over 20 years, with an historical focus on prime conforming product. Formerly known as FT Mortgage Companies, First Horizon completed the consolidation of its separately branded originating entities under the First Horizon name as of the end of 2000. As of Aug. 31, 2002 First Horizon's servicing portfolio consisted of 422,649 loans with an unpaid principal balance of $50.9 billion. Approximately 80% of the servicing portfolio is comprised of Fannie Mae, Freddie Mac and Ginnie Mae product.

Over the last year, First Horizon has introduced a more robust training program throughout its servicing operation, increased efficiencies by consolidating servers, and made numerous technology enhancements to build redundancy and increase productivity in their operation. First Horizon's ongoing infrastructure improvements should position the company well for managing its portfolio growth and responding to potentially unfavorable market conditions.

Fitch has reviewed First Horizon's servicing operations and believes that First Horizon has the appropriate staff, technology, procedures and controls in place to manage its current products. Fitch will continue to monitor First Horizon's ongoing effectiveness in managing its servicing operations, as the company pursues its planned growth initiatives.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within each of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on the review and rating process for servicers, see Fitch Research on 'Rating Residential Loan Servicers', dated Aug. 3, 1999 and available on the Fitch Ratings web site at 'www.fitchratings.com'.