Fitch Lowers NetBank's Servicer Rating

Fitch Ratings has downgraded NetBank's residential mortgage primary servicer rating from RPS3-plus to RBS3 for prime-quality loans.Fitch attributed the downgrade to recent profitability pressure and management's "delayed response in correcting repeat audit findings and customer service call center delays." The rating agency said NetBank's operating results have been hurt by the poor performance of the company's mortgage lending business. Specifically, Fitch cited concern about what it termed weaknesses in management's ability to promptly address audit findings relating to claims processing, delays in foreclosure referral, the timeliness of policy and procedural updates, and insufficient outbound calling campaigns in the area of default management. Fitch also cited concern about customer service hold times and abandonment rates in the call center, which "rose significantly above industry averages." Fitch said the weaknesses cited in the audit have either been corrected or are subject to an action plan to correct them. Fitch's servicer ratings are based on a scale of one to five, with one being the highest rating. The rating agency can be found online at http://www.fitchratings.com.