Fitch Ratings has placed the U.S. residential servicer ratings for Aurora Loan Services (Aurora) on Rating Watch Negative as follows:
--Residential primary servicer rating for Alt-A product at 'RPS2+';
--Residential primary servicer rating for subprime product at 'RPS2';
--Residential special servicer rating at 'RSS2';
--Residential mater servicer rating at 'RMS1'.
The servicer rating actions reflect the change in financial condition of Aurora's ultimate parent, Lehman Brothers Holdings Inc. (Lehman). Aurora is owned by Lehman Brothers Bank, a subsidiary of Lehman. On Sept. 9, 2008, Fitch placed Lehman's long- and short-term Issuer Default Ratings (IDRs) of 'A+' and 'F1' respectively, and its subsidiaries on Rating Watch Negative in light of heightened pressures that have, in Fitch's view, adversely limited Lehman's financial flexibility and its ability to raise capital.
The Rating Watch Negative indicates that Fitch may either downgrade or affirm Aurora's servicer ratings depending upon the stability of its servicing portfolio, operational capabilities, and financial condition. A company's financial condition is an important component of Fitch's servicer rating analysis. Fitch will continue to monitor Lehman's financial condition and its impact on Aurora's servicing platform.
Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's report 'Rating U.S. Residential Mortgage Servicers', dated Nov. 29, 2006, which is 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.