Fitch Eyes AMC Servicer Ratings

The residential primary servicer rating for subprime product and the special servicer rating of AMC Mortgage Services Inc. have been placed on Rating Watch Evolving by Fitch Ratings.The company's primary servicer rating is RPS2-plus, and its special servicer rating is RSS2-plus. (Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating.) Fitch said AMC is "experiencing financial pressure," pointing to the situation of its parent company, ACC Capital Holdings. "Fitch believes that ACH's financial flexibility is constrained by significant settlement and restructuring charges taken in recent quarters as well as the increasingly challenging operating environment in the subprime mortgage market," the rating agency said. "While other originators and servicers face these challenges as well, AMC's sharp decline in origination volume has caused considerable seasoning of the servicing portfolio, which is resulting in increasing delinquency levels and contributing to a cost of servicing that is significantly higher than the industry average." Fitch can be found online at http://www.fitchratings.com.