In a wide-ranging report detailing its concern for the home equity lending market, Fitch Ratings took ratings actions on eight banks, including National City and Washington Mutual, both of which saw their long-term benchmark issuer default ratings lowered. National City saw its IDR dropped to A from a previous A+ rating, while WaMu saw its IDR dropped to the BBB level, Fitch said. "Deterioration within home equity portfolios will clearly emerge in first-quarter 2008," the agency said in a press statement late Friday, "which is earlier than Fitch previously expected." Also downgraded were First Horizon National Corporation (long-term IDR to BBB+) and First Tennessee Bank, NA (long-term IDR to BBB+), both of which Fitch said faced significant exposure not only to a deteriorating home equity portfolio, but were also showing substantial weaknesses in their construction lending portfolios. "Home equity delinquency rates are rising at a far more rapid pace than even most bankers' and analysts' grim outlook for 2008 had anticipated," it said. The agency characterized home equity loans originated by brokers, and located in a locale enduring swift price declines such as California, as "particularly toxic." Fitch said its downgrade of Washington Mutual reflected a higher concentration in not only home equity lending, but also residential mortgage loans, across the credit spectrum. While subprime makes up about 7 percent of loans and a disproportionate amount of net charge-offs at the Seattle-based bank, the rating agency said it "remains concerned about the broader loan portfolio that is consumer real estate secured." Approximately 37 percent of WaMu's total loan portfolio comprises residential mortgage and home equity loans in California. Fitch also placed the benchmark long-term issuer default ratings Citigroup, Bank of America, Fifth Third Bank and SunTrust on negative watch, signaling that another round of downgrades may soon be forthcoming. All had been assigned negative outlooks previously. "The pace of deterioration in home equity and possibly other consumer loan portfolios may result in a rating change sooner than had been anticipated," said Fitch. For more information, visit