NovaStar Servicer Rating Downgraded

May 31, 2007, 2:00 p.m. EDT 1 Min Read

Fitch Ratings has downgraded the residential primary servicer rating for subprime loans of Kansas City, Mo.-based NovaStar Mortgage Inc. from RPS2-minus to RPS3-plus and removed it from Rating Watch Negative.Fitch said the downgrade reflects "the challenging subprime mortgage environment," uncertainties regarding the company's profitability, and concerns that financial challenges may hurt its servicing operation and servicing quality. Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating.

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