Fitch Reviews Servicing Transfer of IndyMac RMBS to SLS

NEW YORK--()--Fitch Ratings has reviewed a request to confirm RMBS ratings in connection with the mortgage servicing rights (MSR) transfer from IndyMac Mortgage Services, a division of OneWest Bank, FSB (IndyMac) to Specialized Loan Servicing (SLS). The loans in the request are anticipated to transfer over a one-month period beginning June 1, 2014.

After reviewing the nine Fitch-rated transactions for which SLS requested a confirmation letter, Fitch does not expect negative rating actions on any Fitch-rated classes as a result of the proposed transfer. However, Fitch notes that this does not preclude the possibility that future rating actions may be taken due to rating criteria or future performance considerations

The transfer of loans from IndyMac marks the company's strategy to sell substantially all of its forward mortgage agency and non-agency portfolio. IndyMac completed the previously announced transfer of approximately 130,000 loans to Ocwen Loan Services in first quarter 2014. It is anticipated after the completion of the SLS transfers, IndyMac will maintain a servicing portfolio of bank-owned assets comprising approximately 34,000 loans.

The transactions Fitch reviewed were originally issued off of Alt-A and subprime RMBS shelves. Fitch currently rates SLS 'RPS2' as a primary servicer for subprime, Alt-A, and closed-end second lien mortgages, and home equity lines of credit (HELOC). The servicer is rated 'RSS2' for its special servicing capabilities. Fitch's Outlook on these servicer ratings is Stable.

The trustees in the deals Fitch reviewed are either Bank of New York Mellon rated 'AA-'/Outlook Stable or Deutsche Bank AG rated 'A+'/Outlook Negative. Both entities are eligible as a direct counterparty based on Fitch's Counterparty Criteria.

While Fitch's confirmation is only on nine transactions, per information provided by SLS, the total MSR purchase comprises 34 RMBS transactions containing over 9,000 loans with an unpaid principal balance (UPB) of $1.9 billion.

The Fitch rated transactions requiring a confirmation letter for the scheduled transfer are:

INABS 2001-C

INABS 2002-B

INABS 2004-B

INABS 2004-C

INABS 2005-A

INABS 2005-B

INABS 2005-C

INDMH 1998-1

MS 2002-HE2

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

Applicable Criteria and Related Research:

--'Rating Criteria for US Residential and Small Balance Commercial Mortgage Servicers' Jan. 30, 2014;

--'Unintended Consequences of rating Confirmation References' Oct 9, 2013;

--'U.S. RMBS Surveillance Criteria' Oct. 9, 2013;

--'Counterparty Criteria for Structured Finance and Covered Bonds' May 13, 2013.

Applicable Criteria and Related Research:

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155

U.S. RMBS Surveillance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720170

Unintended Consequences of Rating Confirmation References

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720279

Rating Criteria for US Residential and Small Balance Commercial Mortgage Servicers

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731747

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Natasha Hanson, +1-212-908-0272
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Grant Bailey, +1-212-908-0544
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Natasha Hanson, +1-212-908-0272
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Grant Bailey, +1-212-908-0544
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com