Fitch Ratings said Monday that it had upgraded the servicer ratings of American Home Mortgage Servicing, the servicing arm tied to now-bankrupt lender American Home Mortgage. Fitch said it moved servicer ratings at AHMS to 'RPS3-' from a previous rating of 'RPS4' for the company's prime, Alt-A, and HE/HELOC mortgage servicing operations. A subsidiary of private equity firm WL Ross purchased the servicing unit out of bankruptcy from American Home in November and created the newly-formed AHMS. Due to the short amount of time in bankruptcy and the subsequent quick sale, the servicing management team and staff remained in place with little to no disruption in servicing, Fitch said in a press statement. (A little selective memory on Fitch's part -- I clearly remember creditor bickering causing some disruption to AHM servicing, although that's not something that's really the servicer's fault here. Still, I think Fitch should have at least covered it.) Since April 2007, there has been a 13 percent reduction in the overall portfolio and as of Oct 31, 2007, there were approximately 197,400 loans totaling $48 billion in the AHMS servicing portfolio. This included 133,200 prime loans totaling $39.6 billion, 32,100 Alt-A loans totaling $6.1 billion, 24,700 home equity product loans totaling 1.6 billion and 7,400 FHA and VA loans totaling $0.7 billion. Fitch cited newly developed in-house REO capabilities as well as an "enhanced" structure around default servicing -- not quite sure what that might be -- as the key drivers behind the upgrade. For more information, visit