Fitch Places Homecomings' Servicer & GMAC-RFC's Master Servicer Ratings on Watch Evolving

NEW YORK--Fitch Ratings places Homecomings Financial's (Homecomings) 'RPS1' residential primary servicer ratings for prime, Alt-A, subprime, high loan-to-value (HLTV), and home equity/home equity lines of credit (HELOC) products and its special servicer rating of 'RSS1' on Rating Watch Evolving. In addition, Fitch also places GMAC-RFC's master servicer rating of 'RMS1' on Rating Watch Evolving. Fitch recently completed its operational review, which confirmed that Homecomings and GMAC-RFC continue to perform at a level consistent with its current servicer ratings. However, the rating actions reflect the underlying corporate rating of Residential Capital Corporation (ResCap), Homecomings' and GMAC-RFC's parent. On Oct. 17, 2005, Fitch placed the corporate ratings of General Motors Acceptance Corporation (GMAC; rated 'BB' by Fitch), parent of ResCap, and ResCap (rated 'BBB-' by Fitch) on Rating Watch Evolving, following General Motors Corp.'s (GM) announcement that it was considering selling a controlling stake in GMAC. The Rating Watch Evolving assigned to Fitch's servicer ratings for Homecomings and GMAC-RFC indicates that the servicer ratings could remain the same or be downgraded depending upon the resolution of the Rating Watch Evolving on ResCap.

On May 4, 2005, GMAC, the parent company of GMAC-RFC and a wholly owned subsidiary of GM, announced a restructuring of its residential mortgage operations. GMAC transferred ownership of GMAC-RFC and a sister company GMAC Mortgage Corporation to ResCap, its recently formed holding company, in an effort to provide operational and financial flexibility. ResCap is a wholly owned indirect subsidiary of GMAC. Absent any progress or clarity on a partial sale of GMAC in the first quarter of 2006, Fitch would likely lower the corporate ratings of GMAC and ResCap.

Fitch determined during its review that Homecomings' primary and special servicing operations continue to perform well as a result of the company's experienced management team, superior technology platform, comprehensive default management processes, and effective management and liquidation of nonperforming residential mortgage loans and real estate owned assets. In addition, GMAC-RFC's master servicer operations are also operating well based on the company's strong master servicing experience and proven ability to oversee the servicing activities of its primary and special servicers. All of the servicer ratings reflect the companies advanced technology, quality customer service, and strong control environment.

The Rating Watch Evolving assigned to Fitch's servicer ratings for Homecomings and GMAC-RFC indicates that the servicer ratings could remain the same or be downgraded depending upon any strategic alternatives that are pursued at the GMAC and/or ResCap level. Fitch believes that Homecomings and GMAC-RFC's servicing operations fully meet the requirements of a servicer at its current rating level. However, Fitch will continue to monitor Homecomings' and GMAC-RFC's ability to maintain current servicing performance and manage any potential attrition as well as ResCap's progress in achieving further separation from GM in the first quarter of 2006.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within each of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on the review and rating process for servicers, see Fitch Research on 'Rating Residential Loan Servicers,' dated Feb. 21, 2003, available on the Fitch web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.