Fitch Take Various Rating Actions on Litton's U.S. Primary Residential Servicer Ratings

NEW YORK--(BUSINESS WIRE)--Fitch Ratings takes the following rating actions on the U.S. residential primary servicer ratings for Litton Loan Servicing, LP:

--U.S. residential primary servicer rating for Alt-A product affirmed at 'RPS1';

--U.S. residential primary servicer rating for Subprime product affirmed at 'RPS1';

--U.S. residential primary specialty servicer rating for M.H. product affirmed at 'RPS2';

--U.S. residential primary specialty servicer rating for Closed-End Second Liens product assigned 'RPS1';

--U.S. residential special servicer rating affirmed at 'RSS1';

--U.S. residential primary servicer rating for High Loan-to-Value product 'RPS1' withdrawn.

The primary servicer rating actions reflect Litton's highly experienced stable management team, strong default management expertise and continued investment in innovative and integrated technology and systems. Litton continues to remain a strong primary servicer of Alt-A, subprime, manufactured housing (MH) and close-end second lien servicing. Although Fitch has not rated Litton for the closed-end second lien product in the past, the servicer has serviced closed-end second lien product effectively for many years. The special servicer rating reflects Litton's ability to liquidate nonperforming assets utilizing its robust default management and technology expertise. The M.H. rating is also based on Litton's ability to effectively manage problematic M.H. assets to conclusion.

In addition, the ratings were determined in accordance with Fitch's criteria 'Rating U.S. Residential Mortgage Servicers' and 'Global Rating Criteria for Structured Finance Servicers'. The ratings also reflect the financial strength of Litton's parent, Goldman Sachs Group Inc. (rated 'A+/F1+' with a Stable Outlook by Fitch).

As of June 30, 2009, Litton's servicing portfolio consisted of 379,657 residential mortgage loans totaling more than $60.6 billion. Litton primary services $57.9 billion consisting of 363,474 loans and special services $2.7 billion consisting of 16,183 loans. The portfolio is broken down by rated product as follows:

--Alt-A 22,194 loans totaling $5.9 billion;

--Subprime 275,115 loans totaling $48.2 billion;

--Closed-End second liens 50,516 loans totaling $2 billion; -M.H. 5,790 loans totaling $445.2 million.

Litton also services GSE and HUD loans. Litton has servicing sites located in Houston and Dallas, TX and Atlanta, GA. Litton services for residential mortgage backed security RMBS securitizations, its owned portfolio and third parties. Litton has been servicing residential loans for 14 years, Alt-A for 13 years, Closed-End second liens for 13 years, M.H. for 10 years and Special servicing for nine years. Litton's M.H. portfolio continues to run off.

Over the past year Litton has revised its loss mitigation processes and organization to effectively modify loans to HAMP guidelines. Since April 2009, Litton has begun modifying to the HAMP guidelines. Litton has also developed a proprietary single system for modifications.

Fitch believes that Litton will remain a strong servicer of Alt-A, subprime, closed-end second liens and MH products as well as an efficient special servicer. However, Fitch will continue to monitor Litton's ability to manage its servicing call metrics with the recent portfolio acquisitions and in a high delinquency environment in a challenging market.

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 and 'Global Rating Criteria for Structured Finance Servicers' dated Sept. 30, 2009, which are available on the Fitch Ratings web site at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

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