IndyMac Sees Servicer Ratings Cut
In the wake of junking IndyMac's debt, Fitch Ratings said Tuesday that it had cut each of the Pasadena-based thrift's residential mortgage servicing ratings down one notch. IndyMac's primary servicer ratings for prime, Alt-A and subprime loan products were cut to 'RPS2,' from a previous rating of 'RPS2+.' A similar cut hit its special servicer rating, dropping the rating for management of distressed mortgages to 'RPS2' as well. The cuts come after Fitch cut IndyMac to junk status on January 24, over concern that the former Alt-A powerhouse will not be able to compete effectively on conforming originations alone, and over the company's recent announcement that it was laying off 2,400 employees. In a press statement, Fitch noted that the layoffs "did not materially affect the servicing firm" -- 29 employees, or 4 percent of the servicing staff, were let go in the latest round of layoffs. Signaling at least some concern for the stability of the servicing portfolio, however, Fitch said Indymac's servicer ratings would remain on negative rating watch. For more information, visit http://www.fitchratings.com.