Fitch Ratings takes the following actions on Irwin Home Equity Corporation's (IHE) U.S. residential servicer ratings:
--The primary servicer rating for HLTV product downgraded to 'RPS3+' from 'RPS2-';
--The primary servicer rating for HELOC product downgraded to 'RPS3+' from 'RPS2-;
--The primary specialty servicer rating for second lien product is assigned at 'RPS3+'.
The ratings are placed on Rating Watch Evolving.
The rating actions are based on the continued financial pressures faced by IHE's parent, Irwin Financial Corporation (IFC) reflecting the difficult operating environment which has severely affected IFC's earnings, asset quality and financial flexibility. Fitch does not publicly rate the credit and financial strength of IFC. However, a company's financial condition is an important component of Fitch's servicer rating analysis.
In July, IFC announced a potential sale of the IHE servicing operation. The Rating Watch Evolving is expected to be resolved upon the resolution of the IHE servicing platform.
Headquartered in San Ramon, CA, IHE services second-lien loans, home equity lines of credit, HLTV loans and first mortgages nationwide. As of June 30, 2008 the company serviced 40,356 loans with an unpaid principal balance (UPB) of more than $2.1 billion, down from 44,960 loans with a UPB of $2.30 billion at year-end 2007. Since the prior year's review, IHE continued to perform operationally consistent with the prior year and implemented a number of processing changes, technology enhancements, and loss mitigation strategies to improve operations and increase productivity.
Fitch will continue to monitor the impact of IHE's financial condition and potential sale of the servicing platform on its loan servicing and operational capabilities.
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.