S&P Lowers Fairbanks Servicer Ratings

The residential subprime and residential special servicer ratings of Fairbanks Capital Corp. have been lowered from Strong to Below Average and removed from CreditWatch negative by Standard & Poor's.As a result, Fairbanks' status as an S&P Select Servicer has been withdrawn, which means it can no longer be named as a primary servicer on future S&P-rated residential mortgage-backed securities deals. S&P said it has conducted surveillance of Fairbanks' servicing operations over the past 18 months, and that recent information from the company reveals "a number of process breakdowns," including a pattern of apparent violations of the Fair Debt Collection Practices Act. "Fairbanks has not fully managed the portfolio growth and integration of functions and platforms associated with the acquisitions that occurred during the past 36 months," S&P said. "The reasons include insufficient management oversight and controls, inadequate technology and training, and ineffective vendor oversight, resulting in an environment that poses significant risk exposure." S&P also pointed to "the amount of consumer-oriented litigation" against Fairbanks in the past year, which has prompted reviews by the Department of Housing and Urban Development and the Federal Trade Commission. S&P can be found online at http://www.standardandpoors.com.