Fitch Eyes Fairbanks Servicer Ratings

The residential primary servicer and special servicer ratings of Fairbanks Capital Corp. have been placed on Rating Watch Negative by Fitch Ratings pending a review of certain reporting and remittance practices.The rating agency said Fairbanks has changed its servicing procedures regarding certain transactions to allow for the charging of interest on advances paid by Fairbanks, raising questions about whether the practice is considered "reasonable and customary" for the industry. To evaluate the practice, Fitch's Operational Risk Group has scheduled an on-site review at the company's four servicing facilities in Utah, Texas, Florida, and Pennsylvania. The review, which is scheduled to be completed within 30 days, will also address allegations by consumers that Fairbanks has engaged in predatory and deceptive business practices. Those allegations, and related lawsuits, have prompted reviews by the Department of Housing and Urban Development and the Federal Trade Commission. Fairbanks' current residential primary servicer ratings are RPS1 for subprime loans and RPS1-minus for alternative-A and home equity loans, and its residential special servicer rating is RSS1. Fitch can be found online at http://www.fitchratings.com.