Several Second-Lien Servicers Get Ratings

Several servicers of second lien loans and home equity lines have recently received new ratings or ratings upgrades. Among those upgraded is Select Portfolio Servicing, which was upgraded by Fitch Ratings.

Fitch raised SPS' residential primary servicer rating to 'RSS2' from 'RSS2-minus' for the management of subprime, alt-A, home equity loans and home equity lines of credit. The company's special servicer rating also was raised one notch to 'RSS2.'

Fitch said the upgrades are based on SPS' ability to "service, collect and liquidate" the loan products affected as well as the company's experienced management team, solid training, effective technology usage and capable loan administration procedures and controls. The ratings also reflect the "solid financial strength" of parent company Credit Suisse. Credit Suisse completed its acquisition of Select Portfolio Servicing, which was formerly known as Fairbanks Capital, in late 2005.

SPS is headquartered in Salt Lake City with an additional servicing site in Jacksonville, Fla. Credit Suisse is integrating SPS into its residential mortgage-backed securities business. As such, SPS is adding wholesale and correspondent fulfillment operations, master servicing to support Credit Suisse's whole loan operations, and interim servicing to provide an option for servicing immediately after loans close. SPS plans to continue offering servicing for third parties. At the end of 2005, SPS' servicing portfolio consisted of approximately 236,500 loans totaling $23.8 billion.

Over the past 18 months, Fitch said SPS has enhanced its platform by internalizing its lockbox operation, implementing full file imaging for new loans, and developing a proprietary offer management system for real estate owned.

In other recent second lien rating actions:

* Moody's has assigned First Horizon Home Loan Corp. a rating of 'SQ2-plus' as a primary servicer of prime loans and affirmed the rating of 'SQ2' as a primary servicer of second lien loans. First Horizon is a wholly owned subsidiary of First Tennessee Bank. First Horizon serviced 618,511 loans with an aggregate balance of $95.4 billion at the end of last year, an increase of 29% from a year earlier. The company's portfolio consists primarily of first liens. Fitch said the company's second lien portfolio totaled about $407 million at year-end 2005.

* Moody's assigned a servicer quality rating of 'SQ3' to Mortgage Lenders Network as a primary servicer of prime, subprime and second lien loans. MLN was founded in 1996 by former executives of ContiMortgage. The company has 220 servicing employees and is headquartered in Middleton, Conn. Second liens account for 9% of the company's servicing portfolio, which consisted of 73,312 loans with an aggregate balanced of approximately $8.9 billion at the end of last year.

SNAPSHOT: Recently Rated Servicers

Name Portfolio

SPS $23.8 Billion

First Horizon $95.4 Billion

MLN $8.9 Billion

SOURCE: Rating Agencies (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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