Fitch Lowers Servicing Fee Requirements

Fitch Ratings has lowered its minimum servicing fee requirement from 25 to 20 basis points for mortgage-backed securities backed by fixed-rate, prime jumbo mortgages.Fitch said that, because there is a move in the marketplace to reduce fees further, it is holding discussions with several third-party industry participants to get a better understanding of the cost of servicing for different portfolio sizes. "While Fitch believes that the cost to service is very low in today's prime jumbo environment, determining the appropriate cost for securitized jumbo residential MBS is difficult, as each servicer calculates its costs differently," the rating agency said. "Thus, a comparison between servicer costs cannot be made easily." Fitch said servicing fees should be a multiple of actual costs to take into account the possibility of economic stress. Fitch can be found online at http://www.fitchratings.com.