NEW YORK--(BUSINESS WIRE)--Fitch Ratings has upgraded American Home Mortgage Servicing (AHMS) residential servicer rating(s) as follows:
--Primary servicer rating for Prime product to 'RPS3-' from 'RPS4';
--Primary servicer rating for Alt-A product to 'RPS3-' from 'RPS4';
--Primary servicer rating for HE/HELOC product to 'RPS3-' from 'RPS4'.
Fitch also removes AHMS's residential servicer ratings from Rating Watch Negative.
The primary servicer ratings are based on AHMS's stable experienced senior management team, competent loan administration and adept default servicing practices. The ratings also reflect the post bankruptcy new company structure created through the purchase of AHMS by WL Ross & Co. LLC (WL Ross).
American Home Mortgage Investment Corp, (AHM) a REIT and prior parent of AHMS, was founded in 1987, and by 2006 had become the 10th largest U.S. retail mortgage lender, originating $59 billion in primarily prime and Alt-A loans last year. On August 1, 2007, AHM closed down its mortgage originations operations. On August 6, 2007, AHM filed for bankruptcy protection with the intention of selling the servicing platform. On November 15, 2007, a subsidiary of WL Ross purchased the servicing unit from AHM and created the newly formed AHMS.
Due to the short amount of time in bankruptcy and the subsequent quick sale, the servicing management team and staff remained in place with little to no disruption in servicing. Since April 2007 there has been a 13% reduction in the overall portfolio and as of Oct 31, 2007, there were approximately 197,400 loans totaling $48 billion in the AHMS servicing portfolio. This included 133,200 prime loans totaling $39.6 billion, 32,100 Alt-A loans totaling $6.1 billion, 24,700 home equity product loans totaling 1.6 billion and 7,400 FHA and VA loans totaling $0.7 billion.
Prior to the bankruptcy and since Fitch's 2006 review, AHMS created a servicing analytic group, developed full REO in house capabilities, enhanced the structure of its default loan servicing areas and expanded the hours of operations for west coast collections. The head of servicing of AHMS is highly seasoned with 27 years of experience and leads a senior management team with over 22 years of experience. Fitch's review of AHMS both pre and post bankruptcy confirmed that AHMS has the capacity, staff and expertise to continue to service. Fitch will continue to monitor AHMS's efforts to grow the portfolio, and to enhance its internal audit functions.
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 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 are also available from the 'Code of Conduct' section of this site.
Contacts
Fitch Ratings, New YorkArt Perlowitz, +1-212-908-0334Mary Kelsch, +1-212-908-0563Sandro Scenga, +1-212-908-0278 (Media Relations)
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