When firms like Litton Loan Servicing, LP begin getting rated for Alt-A servicing, you just know there's trouble in the sector: Fitch Ratings said earlier this week that it had assigned the Houston-based servicing platform for Alt-A products at RPS1, the agency's highest rating for any servicer. Litton cut its teeth in the wild and woolly scratch-and-dent mortgage servicing space, as part of Credit-Based Asset Servicing and Securitization, or C-BASS; the firm is one of the more highly-regarded special servicing operations in the industry, and a rating in the Alt-A servicing space suggests that the company is expanding outside of subprime mortgages. It also suggests the firm could be looking to acquire some or part of the IndyMac Federal Bank servicing portfolio currently being managed by the Federal Deposit Insurance Corp., sources suggested to HousingWire Wednesday morning. But that's merely rumor; the firm could just as easily be looking to acquire other available Alt-A portfolios, as well, of course. That said, the FDIC has said that it will look to sell off the servicing portfolio by the end of the year, according to an earlier report at industry trade publication National Mortgage News. Litton is the de facto servicing arm of Goldman Sachs (GS), with the Wall Street bank having integrated its operations with that of smaller Avelo Mortgage LLC earlier this year. And Litton has been on the acquisitions trail, picking up a $12.2 billion servicing portfolio from failed S&L Fremont Investment & Loan earlier this year. Fitch said it had not rated Litton for the Alt-A product in the past, but said that the servicer has "serviced Alt-A product effectively for many years." Beyond the new Alt-A rating, Fitch also affirmed Litton's subprime, HTLV, MH and special servicer ratings at or near its top rating levels in each category. For more information, visit http://www.fitchratings.com. Write to Paul Jackson at paul.jackson@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.