Fitch Ratings today said it might lower its 'AAA' rating on Standard & Poor's, as the financial ratings business continues to reel from a complete lack of anything to actually rate in residential mortgage-backed securities. Fitch said that S&P would likely face a three-notch downgrade unless the agency could somehow drum up some RMBS or CDO business in the next few weeks. "Actually, even a CMBS issue or two would probably be enough to boost the overall ratings level in our models," said one Fitch analyst. "It's not like we're being picky here." The rating agency suggested that S&P might also be able to stave off a ratings downgrade if it could somehow find a way to expand the ratings business into the agency-backed mortgage market. Currently, given either an implicit or explicit government guarantee, major rating agencies do not get paid to rate mortgage-backed bond issues backed by Fannie Mae, Freddie Mac, and Ginnie Mae. S&P, in a prepared statement, said it may try to begin rating Fannie and Freddie MBS anyway. "We remain convinced that the market will derive the same value from our ratings of Fannie and Freddie-backed mortgage securities as they already do out of our ratings for private-party MBS," it said. The agency didn't specify how it expected to be paid for its efforts, but said that rating agency-backed MBS would at least help staff "remain sharp" until investor confidence returned to the secondary mortgage market. For its part, Moody's Investors Service said that it would look to expand its ratings universe, launching a new subsidiary in June that will compete with other ratings services such as Consumer Reports and Edmunds. "We feel that our expertise in rating things will transfer well into the consumer space," said a senior director in Moody's newly-formed consumer ratings group. "We're planning to start rating automobiles in June," said the Moody's director. The agency is still negotiating on its "value proposition" with key car manufacturers that it expects to pay to obtain the ratings, according to a company spokesperson. While Moody's doesn't face an imminent downgrade by Fitch, it has been assigned a negative outlook by the company's analysts. Any downgrade by Fitch would be the company's second such move in just the past two weeks; the agency downgraded itself by two notches early last week, and now holds its own lowest investment-grade rating.