Moody's Downgrades ResCap Servicer Rating

Moody's Investors Service has downgraded the servicer quality rating of GMAC ResCap as a master servicer from SQ2 to SQ2-minus. The rating remains on review for possible further downgrade. Moody's said the downgrade reflects increasingly difficult market conditions that are putting stress on the servicing operations. While the master servicing operations have remained profitable, Residential Capital LLC (which houses the GMAC ResCap master servicing operations) and GMAC "continue to be under significant financial pressure," the rating agency said. On Sept 2, GMAC and ResCap announced plans to significantly downsize the ResCap operations. The ratings of both companies remain under negative outlook. As GMAC ResCap continues to reduce staff and outsource master servicing functions to cut costs, Moody's said it is "uncertain about GMAC ResCap's willingness and ability to continue investing in the platform." The rating agency can be found online at http://www.moodys.com.