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I AGREE
16 Apr 2012
U.S. Residential Mortgage Servicer Rating Actions
New York, April 16, 2012 -- Moody's has confirmed the following servicer quality ("SQ")
ratings of GMAC Mortgage, LLC ("GMAC Mortgage"):
SQ3+ as a Primary Servicer of prime residential mortgage
SQ3 as a Primary Servicer of subprime residential mortgage loans
SQ3 as a Primary Servicer of second lien loans
SQ3 as a Primary Servicer of HLTV residential mortgage loans
SQ3 as a Special Servicer
The ratings are no longer on review for downgrade.
GMAC Mortgage is subsidiary of Residential Capital LLC, ("ResCap")
which is a subsidiary of Ally Financial Inc. ("Ally").
Ally and ResCap have senior unsecured ratings of B1 and of Ca, respectively.
RATINGS RATIONALE
Moody's initiated the review for downgrade on September 24,
2010 based on concerns regarding GMAC Mortgage's foreclosure document
execution practices.
Since then, GMAC Mortgage has conducted an internal review of its
foreclosure practices. The company also has revamped its foreclosure
processes and brought more processes in-house, increased
the number of employees handling foreclosure documents and the hours of
training provided to those employees, and implemented reviews of
all pending foreclosure sales by an internal quality control team independent
of the foreclosure department.
Moody's increased the foreclosure and REO timeline assessment for
the Primary Servicer of prime loans' rating to above average from
average based on the company's timeline performance relative to
its peers.
GMAC Mortgage's corporate parent, ResCap, continues
to face a difficult market environment that places financial stress on
the operations of its servicing subsidiaries. This, combined
with the company's reliance on Ally for ongoing financial support and
the uncertainty regarding the future of ResCap, continues to negatively
impact GMAC Mortgage's business strength assessment and overall SQ ratings.
GMAC Mortgage's primary servicing portfolio totaled approximately
2.4 million loans for an unpaid principal balance of approximately
$375 billion as of October 2011.
The previous rating action for GMAC Mortgage's SQ ratings occurred
on December 22, 2011. At that time, Moody's affirmed
the company's SQ ratings and maintained on review for downgrade
all of GMAC Mortgage's SQ ratings.
Moody's SQ ratings represent its view of a servicer's ability to prevent
or mitigate asset pool losses across changing markets. The rating
scale ranges from SQ1 (strong) to SQ5 (weak). Where appropriate,
a "+" or "-" modifier will be appended to the relevant rating
to indicate a servicer's relative servicing quality within a particular
category. Moody's servicer ratings are differentiated in the marketplace
by focusing on performance management. SQ ratings for U.S.
residential mortgage servicers incorporate assessments of delinquency
transition rates, foreclosure timeline management, loan cure
rates, recoveries, loan resolution outcomes, and REO
management -- all critical indicators of a servicer's ability
to maximize returns from mortgage portfolios.
Moody's servicer ratings also consider the company's ability to maintain
its focus on high quality servicing in an economic downturn. Servicing
operations can be stressed by increasing the number of delinquent loans
while at the same time increasing the need for liquidity. The SQ
rating reflects our expectation of the impact that the servicing will
have on the on-going credit performance of the portfolio.
For this reason, Moody's monitors SQ ratings based on periodic information
provided by servicers and conducts a formal re-evaluation of its
servicer ratings annually.
The methodology used in this rating was "Moody's Approach to Rating Residential
Mortgage Servicers" published in January 2001. Please see the Credit
Policy page on www.moodys.com for a copy of this methodology.
Other factors used in this rating are described in "Updated Moody's Servicer
Quality Rating Scale and Definitions" published in May 2005.
REGULATORY DISCLOSURES
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses
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Please see ratings tab on the issuer/entity page on www.moodys.com
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Please see the ratings disclosure page on our website www.moodys.com
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Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Gene Berman
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
William Fricke
VP - Senior Credit Officer
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 confirms GMAC's SQ ratings
No Related Data.
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