FITCH DOWNGRADES SAXON'S U.S. RESIDENTIAL SERVICER RATINGS; ON WATCH NEGATIVE
April 5, 2012
NEW YORK -- Fitch Ratings has downgraded Saxon Mortgage Services, Inc.'s (Saxon) U.S. residential servicer ratings as follows:
--Residential primary servicer rating for subprime product to 'RPS3' from 'RPS2+';
--Residential special servicer rating to 'RSS3' from 'RSS2+'.
In addition, Fitch has placed the servicer ratings on Watch Negative.
The rating downgrades and Rating Watch Negative are based on the April 2, 2012 sale of MSRs and subservicing rights for certain non-agency RMBS transactions previously serviced at Saxon. The company stated that it expects all remaining servicing assets will be transferred to new servicer(s) within the next few months and the platform will be closed at that time. In addition, the rating downgrades and Rating Watch Negative reflect the increased burden of managing delinquent and defaulted mortgages in an environment of heightened regulatory scrutiny, including the areas of risk identified by various regulatory bodies which ultimately resulted in consent orders with a number of large servicers. Saxon's indirect parent, Morgan Stanley, entered into a Consent Order with the Board of Governors of the Federal Reserve System on April 2, 2012 concerning allegations of foreclosure processing deficiencies.
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 'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria', dated Jan. 31, 2011, which is available on the Fitch Ratings web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
