Last week, Fitch ratings said it had removed GMAC Mortgage, GMAC-RFC and Homecomings Financial from its Ratings Watch Evolving List. The three companies had been on the rating agencies cautionary list while General Motors sold its controlling interest in Residential Capital (ResCap), which serves as the parent of each mortgage organization. On November 30, 2006, Fitch upgraded ResCap’s debt rating to ‘BBB’ from ‘BBB-‘ and its parent GMAC LLC’s debt rating to ‘BB+’ from ‘BB’ following the closing of the sale of a controlling interest in GMAC to a consortium led by Cerberus FIM Investors, LLC. The ratings for ResCap and GMAC were also removed from Rating Watch Positive, where they were originally placed on April 3, 2006. With the closing of the transaction, the ratings of ResCap and GMAC will no longer be directly linked to those of General Motors Corp. (GM). Fitch had previously placed the corporate ratings of GMAC, parent of ResCap, and ResCap on Rating Watch Evolving on Oct. 17, 2005 following GM’s announcement that it was considering selling a controlling stake in GMAC. With the sale complete, Fitch said that ResCap’s Residential Finance Group is integrating its U.S. servicing operations to form a Debt Servicing Utility (DSU) for the company’s domestic servicing portfolios. The initiative will involve the integration of its primary, subservicing and master servicing operations which includes the servicing operations of GMAC Mortgage, Homecomings Financial and GMAC-RFC master servicing. The DSU is intended to be a common servicing platform capable of supporting any loan product (including mortgages, consumer loans, and leases), brand or servicing requirements. In addition, Fitch affirmed, upgraded and assigned a number of servicer ratings to the three companies. Ratings actions including:
- GMAC: Asssigned ‘RPS1’ subservicer rating; affirmed at ‘RPS1’ for primary servicing; upgraded to ‘RSS1’ for special servicing
- Homecomings: Affirmed at ‘RPS1’ for primary servicing; affirmed at ‘RSS1’ for special servicing
- GMAC-RFC: Affirmed at ‘RMS1’ for master servicing
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 mortgage servicer rating program, please see Fitch’s report, ‘Rating US Residential Mortgage Servicers,’ dated Nov. 29, 2006 on Fitch’s website at www.fitchratings.com.
