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Fitch Resolves Rating Watch Negative on Nationstar Serviced U.S. RMBS

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has resolved the Rating Watch Negative on 46 U.S. RMBS classes serviced by Nationstar Mortgage (Nationstar). Six classes were downgraded and placed on Outlook Stable and the remaining 40 classes were affirmed and placed on Outlook Stable.

The classes are collateralized by mortgage loans recently transferred from Bank of America N.A. (BofA) to Nationstar. All of the classes held investment grade ratings prior to the rating actions and were on Rating Watch Negative due to interest shortfalls. The interest shortfalls were the result of loan performance and a recoupment of prior servicer advances on delinquent loans by Nationstar.

All but two of the classes have recovered all prior interest shortfalls as of the latest remittance date.

A spreadsheet detailing the actions can be found on Fitch's website by performing a title search for 'U.S. RMBS Rating Actions for July 16, 2014' or by clicking on the link.

KEY RATING DRIVERS

Whether the interest shortfalls were recovered generally determined the rating action on the affected classes. Classes that recovered the interest shortfalls were affirmed at their current rating with the exception of the four classes rated higher than 'Asf.' Even though these four classes recovered the interest shortfalls, the ratings were downgraded to 'Asf' in accordance with our rating cap criteria. The two classes that have not yet recovered the interest shortfalls were downgraded to 'BBsf,' to reflect a lower likelihood of recovery.

RATING SENSITIVITIES

While Fitch views this as unlikely, these classes may incur additional interest shortfalls related to future servicer advancing recoupment. Under such a scenario a rating committee will review all affected classes to assess the likelihood of recovery.

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

Applicable Criteria and Related Research:

--'U.S. RMBS Surveillance Criteria' (June 24, 2014);

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'U.S. RMBS Loan Loss Model Criteria' (Dec. 23, 2013);

--'U.S. RMBS Cash Flow Analysis Criteria' (April 16, 2014);

--'Criteria for Interest Rate Stresses in Structured Finance Transactions' (Jan. 25, 2013);

--'Criteria for Rating Caps and Limitations in Global Structured Finance Transactions' (May 28, 2014);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 14, 2014);

--'Structured Finance Recovery Estimates for Distressed Securities' (Nov. 18, 2011).

Applicable Criteria and Related Research: U.S. RMBS Rating Actions for July 16, 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=752536

U.S. RMBS Surveillance Criteria - Effective October 9, 2013 to June 24, 2014

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

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

U.S. RMBS Loan Loss Model Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=727095

U.S. RMBS Cash Flow Analysis Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746027

Criteria for Interest Rate Stresses in Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695535

Criteria for Rating Caps and Limitations in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748781

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Structured Finance Recovery Estimates for Distressed Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656557

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=839879

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Media Relations
Sandro Scenga, New York
Tel: +1 212-908-0278
Email: sandro.scenga@fitchratings.com
or
Presenting Analyst
Ryan O'Loughlin
Analyst
+1-212-908-0387
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Grant Bailey
Managing Director
+1-212-908-0544