Fitch Downgrades & Places Homecomings' & GMAC-RFC's Resi Servicer Ratings on Rating Watch Negative

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded Homecomings Financial Network LLC's (Homecomings) and GMAC-RFC's servicer ratings as follows:

Homecomings:

--Residential primary servicer rating for prime product to 'RPS1-' from 'RPS1' and placed on Rating Watch Negative;

--Residential primary servicer rating for Alt-A product to 'RPS2+' from 'RPS1' and placed on Rating Watch Negative;

--Residential primary servicer rating for subprime product to 'RPS2+' from 'RPS1' and placed on Rating Watch Negative;

--Residential primary servicer rating for high loan-to-value product to 'RPS2+' from 'RPS1' and placed on Rating Watch Negative;

--Residential primary servicer rating for home equity/home equity lines of credit product to 'RPS2+' from 'RPS1' and placed on Rating Watch Negative

--Residential special servicer rating to 'RSS1-' from 'RSS1' and placed on Rating Watch Negative.

GMAC-RFC:

--Residential master servicer rating to 'RMS2+' from 'RMS1' and placed on Rating Watch Negative.

The rating actions reflect the underlying corporate rating of Homecomings' and GMAC-RFC's parent, Residential Capital LLC (ResCap), whose senior debt was recently downgraded by Fitch to 'BB+' from 'BBB' and placed on Rating Watch Negative. The rating actions also reflect the continued pressure on ResCap's liquidity position and financial flexibility in the increasingly challenged residential mortgage market and its potential impact on Homecomings' and GMAC-RFC's loan servicing operations. A company's financial condition is an important component of Fitch's servicer rating analysis.

Fitch will continue to monitor ResCap's financial condition and its ability to increase utilization of more stable and reliable sources of financing and its impact on Homecomings' and GMAC-RFC's servicing and operational capabilities and performance. In addition, Fitch plans to perform its annual servicer review on Homecomings' and GMAC-RFC's servicing operations in September 2007, which may provide additional information. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicers' portfolios, operational capabilities, and financial condition.

For more information on the impact of financial condition on Fitch's servicer ratings, please see Fitch's report 'Impact of Financial Condition on U.S. Residential Mortgage Servicer Ratings' dated March 26, 2007, which is available on the Fitch Ratings web site at www.fitchratings.com.

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.