Mortgage ratings actions during November
By CHRISTY ROBINSON
12/2/2002

Fitch Ratings affirmed the special servicer rating of CIGNA Investments, Inc., which is "CSS2+".

The affirmation is due to continued enhancements to CIGNA's data warehousing capabilities, maintenance of a highly experience real estate staff, and its focus on internal controls, Fitch said. The affirmation also came from CIGNA's experience in working out, managing, and liquidating assets from its real estate portfolio, especially large assets; and its financial support of its ultimate parent, CIGNA Corp.

CIGNA was named special servicer on one single-borrower commercial mortgage-backed security (CMBS) transaction in September totaling about $422 million. As of Sept. 30, the company was specially servicing 17 non-CMBS loans totaling $243 million.

Fitch rates commercial mortgage primary, master, and special servicers on a scale of 1 to 4, with 1 being the highest rating. Residential ratings are on a scale of 1 to 5, with 1 being the highest rating. Within each of these rating levels, Fitch further differentiates ratings by a plus (+) and minus (-), the ratings servicer said.

Fitch affirmed Aetna Life Insurance Co.'s "CSS2" commercial mortgage special servicer rating.

The reason cited was the company's knowledgeable, tenured staff and its experience working out, managing, and liquidating commercial mortgage loans and real estate owned assets. The rating was also based on Aetna's strong asset management team and the stability of its real estate group, with no employee turnover during the past five years.

Aetna was named special servicer on two CMBS transactions in September, representing 33 loans and totaling $534.5 million, and was actively specially servicing two CMBS loans, totaling $28.3 million. As of Sept. 30, Aetna was specially servicing 10 non-CMBS loans totaling $42 million.

Fitch upgraded Cendant Mortgage Corp.'s residential primary servicer rating for prime product to "RPS1-" from "RPS2+". It also assigned the company a "FPS2+" rating for primary servicer of home equity and home equity lines of credit (HELOC) loans.

The "RPS1-" upgrade reflects the company's continued solid collateral performance, seasoned servicing management team, tested internal controls, robust technology platform, and the financial stability of its parent, PHH Corporation. The new "RPS2+" rating reflects Cendant's established internal controls, solid loan administration processes, and effective default management practices for second liens, Fitch said.

Cendant has been servicing prime product for more than 24 years, Fitch said. As of Sept. 30, the company serviced a residential portfolio of more than 811,000 loans for more than $111.8 billion. That also includes more than 36,000 HELOC loans. More than 77% of the portfolio is comprised of Fannie Mae, Freddie Mac, and Ginnie Mae servicing.

Fitch affirmed Homecomings Financial's "RPS1" residential servicer ratings for prime, Alt-A, subprime, high loan-to-value (LTV), and home equity and home equity lines of credit products. It affirms the company's special servicer rating of "RSS1" and its master servicer rating of "RMS1".

All the ratings are due to the company's solid internal control environment, proven performing and defaulted loan administration capabilities, and enhanced training programs, Fitch said.

As of June 30, the company's servicing portfolio consisted of 562,248 loans with a balance of $55.2 billion; $25.7 billion of which was prime and Alt-A loans, $20.6 billion of which was subprime loans, and $8.9 billion of which was second lien home equity, HELOC, and high LTV loans. Its master servicing portfolio consisted of 689,679 loans with a total balance of $81.3 billion.

Homecomings is a wholly-owned subsidiary and servicing arm of GMAC-RFC.

Fitch upgraded the master servicer rating of iStar Asset Services to "CMS2-" from "CMS3+", and affirmed its primary servicer rating at "CPS2".

The master servicer upgrade reflects the company's strengthened automated reporting capabilities, strong surveillance capabilities, including quarterly risk ratings and its favorable interaction with Fitch's CMBS surveillance group, Fitch said. The primary servicer rating is based on iSAS's continued ability to effectively service commercial mortgage loans, as well as its particular strength in the servicing of large loans and loans with complex structures.

As of Sept. 30, iSAS's servicing portfolio comprised 146 loans totaling $3.7 billion, $731 million of which are securitized loans. Its parent company is iStar Financial Inc.

Fitch upgraded Ameriquest Mortgage Company's residential primary servicer rating for subprime product to "RPS2" from "RPS2-". Ameriquest was also assigned a special servicer rating of "RSS2-" for residential mortgages.

Among the reasons for the residential primary servicer rating was Ameriquest's credible training program and its efficient default management strategies and procedures, Fitch said. The special servicer rating was due to the company's ability to successfully manage and resolve nonperforming and subperforming residential mortgage loans, among other assets.

As of July 31, Ameriquest serviced almost 120,000 subprime loans with a total balance of almost $14 billion. More than 51% of loans in the current servicing portfolio are part of private residential MBS.

Fitch affirmed Chase Manhattan Mortgage Corporation's "RMS1" residential master servicer rating.

The rating was based on Chase's solid master servicing experience, strong portfolio management procedures and controls, experienced and tenured management and staff, and the financial strength of its parent, JP Morgan Chase & Company, which is rated "A+" by Fitch. The affirmation also reflects Chase's continued proficiency in managing the servicing functions.

Chase is currently the nation's fourth largest residential mortgage lender and third largest servicer, Fitch said. As of Sept. 30, Chase master serviced 51,622 loans for more than $11.2 billion.

Fitch raised the individual rating of Bank of America Corporation and its affiliates to "A/B" from "B", and assigned a Positive Rating Outlook to the bank's long-term ratings. The bank's long-term ratings were affirmed with a Stable Rating Outlook.

The rating elevation is due to recent improvements to the bank's credit risk profile and to its performance relative to its peers in a difficult credit environment. If management can sustain this progress, the bank could advance toward a higher rating level, Fitch said.

Bank of America is one of the three largest U.S. banking companies with leading positions in corporate, mortgage, and credit card lending. Good risk management systems and a conservative philosophy should help to reduce the amount of credit risk the bank faces going forward, Fitch said.

The bank exited subprime mortgage lending in 2001, which was one of the company's more problematic business lines, Fitch said.

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