Fitch Upgrades CitiMortgage's Master Servicer Rating to 'RMS1'; Affirms Primary Servicer Rtgs

Fitch Ratings upgrades CitiMortgage Inc.'s (Citi) residential master servicer rating to 'RMS1' from 'RMS1-'. In addition, Fitch affirms Citi's residential primary servicer ratings of 'RPS1' for prime and Alt-A products.

The primary servicer ratings reflect Citi's experienced management team, superior technology platform, and extensive risk management practices. The master servicer rating is based on Citi's accomplished master servicing experience, strong portfolio management, and tightened procedures and controls. The rating also reflects the company's proven ability to oversee the servicing activities of its primary and special servicers. All of the ratings incorporate the strong financial condition of its parent, Citigroup, Inc., which is rated 'AA+' by Fitch.

As of June 30, 2005, Citi primary serviced a portfolio of over 3 million loans totaling over $384 billion. Of this total, approximately $254 billion was prime product, with the balance being Alt-A and HE/HELOC. This was an increase of nearly 67% in loan volume and 50% in dollar volume since Fitch's last review. As of July 31, 2005, Citi master serviced over 95,000 loans totaling over $15.6 billion. This was an increase of approximately 44% in loan volume and 78% in dollar volume since Fitch's last review.

Over the last year, Citi successfully integrated the Principal Residential Mortgage, Inc. (PRMI) servicing portfolio of over $115 billion, with an additional $10 billion in servicing from Hibernia National Bank. Citi also acquired a small portfolio from The First American Bank of Texas, with approximately $200 million in servicing. Over the last year, Citi has enhanced its customer service practices, upgraded its technology platform, reinforced its already robust training and leadership development programs, and has continued to tighten internal controls. Citi has also instituted a number of process improvements, which have bolstered its servicing platform. In addition, Citi continues to expand its in-house training programs to accommodate the training and staffing needs for its increased portfolio.

Fitch has reviewed the company's servicing operations and believes that Citi has the appropriate staff, default procedures, and controls in place to manage its growth initiatives while maintaining performance. However, Fitch will continue to monitor Citi's performance and evaluate its progress in managing its operations and portfolio growth initiatives.

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 Ratings 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.