Fitch Affirms HSBC Mortgage Corp (USA) Residential Svcr Rtg at 'RPS2+' & Assigns Subprime Rtg

NEW YORK--()--Fitch Ratings has affirmed the servicer ratings of HSBC Mortgage Corporation (USA) (HMC) as follows:

--Residential primary servicer rating for Prime product at 'RPS2+';

--Residential primary servicer rating for Alt-A product at 'RPS2+';

--Residential primary servicer rating for HE/HELOC product at 'RPS2+'.

In addition, Fitch has assigned HMC a 'RPS2-' residential primary servicer rating for Subprime product.

The primary servicer ratings reflect HMC's experienced management team, adequate internal controls and integrated technology. In addition, the ratings also incorporate the strong financial condition of HMC's parent, HSBC Bank USA, NA (HSBC), rated 'AA/F1' by Fitch.

HMC is a wholly owned subsidiary of HSBC, which is a subsidiary of HSBC Holdings Plc. HMC is located in Depew, NY, with a subprime collections unit in Elmhurst, IL. In addition to its U.S. locations, HMC has operations in HSBC's group service centers (GSC) in Bangalore, India and Manila, Philippines. The GSC sites perform a portion of new loan setup and data validation, account reconciliations, payment and payoff processing, suspense processing, insurance processing, inbound customer service calls account maintenance, ARM audits and processing, discharge research and processing, inbound and outbound collections calls for prime loans, and foreclosure and bankruptcy setup and monitoring. As of June 30, 2007, HMC serviced more than 454,000 loans totaling $68.4 billion. HMC's portfolio includes approximately $44.9 billion prime loans, $9.3 billion Alt-A loans, and $2.2 billion HE/HELOC loans, and $3.2 billion subprime loans.

Since Fitch's prior review, HMC expanded its use of HSBC's GSC sites to include Manila, Philippines, implemented an automated loss mitigation system, began interim servicing and handling repurchases for affiliate subprime originator Decision One, and acquired servicing rights for several pools owned by HSBC Securities, transferring loans in from other servicers. Fitch's review of HMC's servicing platform confirmed that the company has a capable servicing platform with the capacity, systems and staff necessary to support its servicing portfolio. However, Fitch will continue to monitor HMC's efforts to maintain servicing performance and strengthen its internal controls in a high 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.

Contacts

Fitch Ratings, New York
Thomas Crowe, +1-212-908-0227
Mary Kelsch, +1-212-908-0563
Sandro Scenga, +1-212-908-0278 (Media Relations)

Contacts

Fitch Ratings, New York
Thomas Crowe, +1-212-908-0227
Mary Kelsch, +1-212-908-0563
Sandro Scenga, +1-212-908-0278 (Media Relations)