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IMCC - Fitch Ratings places Fairbanks Capital Corp's (Fairbanks) residential primary servicer ratings of 'RPS1'for subprime,'RPS1-'for Alt-A and Home Equity (closed-end seconds and HELOCs) and the 'RSS1'residential special servicer rating on Rating Watch Negative, pending Fitch's determination of the impact of certain of their reporting and remittance practices.
Fairbanks changed its servicing procedures with regard to certain transactions, including IMC Mortgage Company and ContiMortgage Corp. issuances, to allow for the charging of interest on advances paid by Fairbanks. Industry participants have questioned whether this practice is considered reasonable and customary for the industry.
To better determine its opinion regarding the above and as a continuation of its efforts to monitor and assess Fairbanks'servicing performance in light of recent events Fitch's Operational Risk Group has scheduled a targeted on-site review. The servicer review phase is scheduled to be completed within the next 30 days and will include visits to Fairbanks'four servicing facilities which are located in Utah, Texas, Florida and Pennsylvania.
The servicer reviews will also focus on the numerous allegations and lawsuits filed against Fairbanks by consumers citing predatory and deceptive business practices, as well as the HUD and FTC Reviews. In addition, the reviews will address Fairbanks practices with regard to the charging of fees, timely posting of payments, timely resolution of customer service complaints, and collection and foreclosure procedures, some of which have been recently changed as a result of the company's efforts to proactively confront these allegations.
If at any time Fitch determines that Fairbanks has not fully met the requirements of a servicer at their current level Fitch will take immediate and definitive action with regard to their servicer ratings.
For more information on Fitch's residential mortgage servicer rating program, please see Fitch's report, 'Residential Mortgage Servicer Ratings', dated Feb. 21, 2003 and available on the Fitch Ratings web site at 'www.fitchratings.com'.
SOURCE: Fitch Ratings
Fitch Ratings, New York Kathleen Tillwitz, 212/908-0239 Diane Pendley, 212/908-0777 Matt Burkhard, 212/908-0540 (Media Relations)
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