New Century's Servicer Rating Downgraded

The residential primary servicer rating for subprime product of New Century Mortgage Corp., a subsidiary of the beleaguered New Century Financial, has been downgraded from RPS3-plus to RPS4 and placed on Rating Watch Negative by Fitch Ratings.The downgrade reflects "uncertainties" over New Century's "ability to maintain adequate funding and remain viable over the near term," the rating agency said. Fitch reported that New Century has said that, if the company is unable to get "satisfactory amendments" to, or waivers of, the covenants in its financing arrangements from enough of its lenders, or obtain new funding sources, its independent auditors "will include an explanatory paragraph indicating that substantial doubt exists as to the company's ability to continue as a going concern." Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating.