Fitch Places GMAC Mortgage Corp.'s Servicer Ratings on Watch Evolving

NEW YORK & HONG KONG--Ratings places GMAC Mortgage Corp.'s (GMAC Mortgage) '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. Fitch recently completed its operational review, which confirmed that GMAC Mortgage continues 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), GMAC Mortgage'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 GMAC Mortgage indicates that the primary servicer ratings could remain the same or be downgraded, and the special servicer rating could remain the same, be upgraded, or downgraded, depending upon the resolution of the Rating Watch Evolving on ResCap.

On May 4, 2005, GMAC, the parent company of GMAC Mortgage and a wholly owned subsidiary of GM, announced a restructuring of its residential mortgage operations. GMAC transferred ownership of GMAC-Mortgage and a sister company GMAC-RFC 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 GMAC Mortgage's primary and special servicing operations continue to perform well as a result of the company's solid loan administration practices, experienced management team, comprehensive internal controls, robust technology platform, and effective management and liquidation of delinquent and nonperforming residential mortgage loans and real estate owned (REO) assets.

The Rating Watch Evolving assigned to Fitch's servicer ratings for GMAC Mortgage indicates that the primary servicer ratings could remain the same or be downgraded, and the special servicer rating could remain the same, be upgraded, or downgraded depending upon any strategic alternatives that are pursued at the GMAC and/or ResCap level. Fitch believes that GMAC Mortgage's servicing operations fully meet the requirements of a servicer at its current rating level. However, Fitch will continue to monitor GMAC Mortgage'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 'Residential Mortgage Servicer Ratings,' 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.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.