Fitch Affirms Wells Fargo's 'RPS2' HELOC Primary Servicer Rating; Assigns Second Lien Rating

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken the following rating actions on the U.S. residential primary servicer ratings for Wells Fargo Home Equity Group, (WFHE), formerly known as Wells Fargo Consumer Credit Group, a division of Wells Fargo Bank, N.A.:

--U.S residential primary servicer rating for Home Equity Line of Credit (HELOC) affirmed at 'RPS2';

--U.S. residential primary specialty servicer rating for second lien product assigned 'RPS2'.

The primary servicer rating actions are based on WFHE's strong management team, highly developed control environment and continued investment in new technology and default management. The ratings also reflect the financial strength of Wells Fargo Bank, N.A.,(WFB; rated 'AA' with a Stable Outlook by Fitch).

WFHE is headquartered in San Francisco, CA and is an originator and servicer of HELOC and second lien fixed-rate products, with four servicing and customer centers located in Beaverton, OR, Billings, MT, Phoenix, AZ and Des Moines, IA. In addition, WFHE has several FTE's dispersed geographically across the US to provide customer fulfillment and organizational support. As of June 30, 2008, WFHE serviced approximately 1.6 million loans totaling $85.5B and this is further broken down as 1,167,012 HELOC's totaling $66.4B and 397,778 second lien fixed rate products totaling $19.1B.

WFHE has made several organizational and personnel changes during the course of this year to address the rising delinquency within its servicing portfolio. The Home Equity Group was transitioned from the Home and Consumer Finance Group to the Diversified Products Group, aligning itself more with the small business segment, business direct and the business banking support groups of WFB. In addition, an executive vice president, who previously was an executive vice president of consumer risk management, was named to head the group and a returning manager of the default management group within the bank assumed the responsibilities of fulfillment and servicing executive.

WFHE also implemented several programs to accelerate its customer contact with the highest risk borrowers and developed various loss mitigation tools to reduce losses. Additionally, WFHE established new dedicated teams to manage both inbound and outbound calls, added new managers to its early and late stage collections, began utilizing a third party provider for late stage collection efforts and started requiring its collectors to assume more responsibility for delinquent accounts, including managing the roll rates.

Fitch believes that WFHE has an experienced servicing staff, adequate processes and procedures and appropriate systems and technology to effectively manage its current servicing portfolio. However, Fitch will continue to monitor the effectiveness of recent and planned changes to WFHE's default administration areas and its ability to maintain performance in a rising delinquency environment.

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.