Popular's Servicer Rating Downgraded

Moody's Investors Service has lowered the residential servicer quality rating of Popular Mortgage Servicing. Moody's dropped the rating one notch from SQ3-plus to SQ3 for the primary servicing of subprime home loans. Moody's also placed the Puerto Rico-based bank's servicer rating on review for further possible downgrade. Moody's said the downgrade was prompted by a decline in the rating agency's assessment of PMSI's collection capabilities. Further review of the company's level of investment in its servicing platform, maintenance of key staffing levels, and ability to retain managers will be among the factors behind future rating actions, Moody's said. PMSI, which serviced $10.9 billion of mortgages as of April 30, is a subsidiary of Popular Inc., the largest commercial bank in Puerto Rico. Moody's can be found online at http://www.moodys.com.