Fitch Places Residential Capital's RMBS Servicer Ratings on Watch Negative

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has placed the residential servicer ratings for Residential Capital LLC's (ResCap) on Rating Watch Negative as follows:

--Residential primary servicer for prime product 'RPS2+';

--Residential primary servicer for Alt-A product 'RPS2+';

--Residential primary servicer for subprime product 'RPS2';

--Residential primary servicer for high loan-to-value (HLTV) product 'RPS2';

--Residential primary servicer for home equity/home equity line of credit (HE/HELOC) product 'RPS2';

--Residential primary specialty - subservicer 'RPS2+';

--Residential special servicer of 'RSS2+';

--Residential master servicer of 'RMS2+'.

The Rating Watch Negative indicates that Fitch may either downgrade or affirm ResCap's servicer ratings depending upon the stability of its servicing portfolio, operational capabilities, and financial condition.

Fitch downgraded ResCap's Issuer Default Rating (IDR) to 'C' from 'BB-' on May 2 following the company's announced debt exchange offer. ResCap's corporate ratings remain on Rating Watch Negative pending execution of the debt exchange offer. The servicer rating actions reflect the continued pressure on ResCap's liquidity position and financial flexibility and the potential impact on the company's servicing operations. Fitch will continue to monitor ResCap's financial condition and its impact on the company's servicing and operational capabilities and performance.

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.