Fremont's Servicer Rating Downgraded

The servicer quality rating of Fremont Investment & Loan as a primary servicer of subprime loans has been downgraded from SQ4 to SQ4-minus by Moody's Investors Service. The rating remains on review for possible further downgrade. In addition, the outlook for Fremont and its parent, Fremont General Corp., remains negative, and the company's servicing stability assessment has been revised from below average to weak, Moody's said. The rating agency said the action was prompted by continued deterioration of financial and operating conditions as well as regulatory actions affecting Fremont and its parent. The Suffolk Superior Court recently issued a preliminary injunction, sought by the Massachusetts attorney general, barring Fremont from initiating or advancing foreclosures on loans that are "presumptively unfair" without first complying with the court's order, Moody's said. The injunction was later modified to further restrict Fremont's efforts to sell mortgage servicing rights on loans serviced in Massachusetts. Moody's said the rating action also stemmed partly from management turnover at Fremont and its parent. Moody's can be found online at http://www.moodys.com.