New York, December 04, 2013 -- Moody's Investors Service ("Moody's") stated today that the transfer of
servicing rights of approximately 14,600 loans from 24 RMBS transactions
from Residential Funding Corporation (RFC)'s bankruptcy estate to
Specialized Loan Servicing (SLS) will not, in and of itself and
at this time, result in a reduction or withdrawal of the current
ratings on the securities issued by these transactions.
Ambac, as insurer on the transactions, sought the transfer
of servicing from RFC to SLS. The transfer is pursuant to a Stipulation
and Order of the Bankruptcy Court, dated October 17, 2013.
Moody's view on the servicing transfer is based primarily on its opinion
that: i) SLS's servicing strategy will not negatively impact
the performance of the loans in the affected transaction; and ii)
SLS is adequately prepared to handle the transfer and continued servicing
of the loans in the affected transaction. SLS is assessed SQ3+
as a primary servicer of subprime residential mortgage loans.
In connection with the servicing transfer, SLS and the trustee made
a number of amendments to the pooling and servicing agreements.
These amendments included, among other things:
• Reference to settlement agreements approved by the Bankruptcy Court,
which resolved claims against the original depositor under the pooling
and servicing agreements and RFC, the original master servicer.
The amendments provide that claims that the Bankruptcy Court settlement
agreements released may not be asserted against the depositor or original
master servicer, but that any other claims arising under the original
pooling and servicing agreements survive the amendments.
• The removal of caps on the amount of modifications the servicer
may perform and the removal of other restrictions on modifications.
• Removal of references to servicing according to the Residential
Funding Program Guide and replacing with "Accepted Servicing Practices."
• The trustee, and not the master servicer, to perform
paying agent duties and certain administrative duties.
• Removal of requirements of the trustee to deliver custodial certifications,
which the agreements had already required to be delivered in the past.
• The addition of a provision providing that the master servicer
will use reasonable efforts to defend the trusts to obtain the highest
possible value in the event a municipality exercises its eminent domain
powers to take a mortgage loan.
• If SLS extends the due date of a loan, it will advance in
accordance with the modified terms and not the original terms.
• Specifies the timing of tax and insurance payments for loans where
taxes and insurance are not escrowed; that SLS will make such advances
prior to the loss of insurance coverage or imposition of a lien.
• Allows the master servicer or subservicer to recoup from general
collections and "amounts held for future distribution" previously
unreimbursed advances that it deems non-recoverable.
• Specifies that SLS will not, until the liquation of the loan,
treat as realized losses principal amounts that the original master servicer
had previously forborne.
• Allows the master servicer to finance its advances through an advance
financing facility.
Moody's view is based primarily on its opinion that the ratings of each
of the securities in the transaction will not have material negative implication
following changes in servicing strategy that occur after transfer of servicing
rights.
Moody's opinion addresses only the current impact on Moody's ratings,
and we do not express an opinion as to whether the transfer of servicing
rights has or could have any other effects that investors may or may not
view positively.
The determination was made without regard to any applicable Certificate
Insurance Policy, with respect to the Insured Certificates.
The methodology used in assessing the credit impact of the servicing transfer
was "US RMBS Surveillance Methodology" published in November 2013.
Other methodology includes "Moody's Methodology For Assessing RMBS Servicer
Quality (SQ)" published in January 2013. Please see the Credit
Policy page on www.moodys.com for a copy of these methodologies.
Affected Transactions:
Residential Asset Securities Corp, 2002-KS4
Residential Asset Securities Corp, 2002-KS6
Residential Asset Securities Corp, 2002-KS8
Residential Asset Mtge Products, 2002-RP1
Residential Asset Mtge Products, 2002-RS4
Residential Asset Mtge Products, 2002-RS5
Residential Asset Mtge Products, 2003-RS6
Residential Asset Securities Corp, 2003-KS5
Residential Asset Mtge Products, 2004-RS5
Residential Asset Securities Corp, 2003-KS4
Residential Asset Securities Corp, 2003-KS9
Residential Asset Mtge Products, 2003-RS5
Residential Asset Securities Corp, 2004-KS4
Residential Asset Mtge Products, 2004-RS9
Residential Asset Mtge Products, 2003-RS3
Residential Asset Securities Corp, 2002-KS1
Residential Asset Mtge Products, 2003-RS2
Residential Asset Mtge Products, 2003-RS4
Residential Asset Mtge Products, 2003-RS1
Residential Asset Mtge Products, 2002-RS6
Residential Asset Mtge Products, 2001-RS3
Residential Asset Mtge Products, 2002-RS7
Residential Asset Mtge Products, 2002-RP2
Residential Asset Mtge Products, 2001-RS1
Mark K Branton
Asst Vice President - Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Deepika Kothari
VP - Sr Credit Officer/Manager
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's: Servicing transfer to Specialized Loan Servicing from RFC has no negative ratings impact on 24 RFC RMBS transactions