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Rooftop RMBS not affected by closure, says Fitch

Fitch Ratings says the recent closure of Rooftop Mortgages will not have any immediate impact on the ratings of its residential mortgage backed securities.

The RMBS have been issued by Farringdon Mortgages and Mansard Mortgages.

Fitch notes that Bear Stearns decision to close Rooftop only impacts origination while the teams responsible for special servicing remain in place.

In the case of Farringdon No. 1 and No. 2, Crown Mortgage Management is the named servicer on the deals responsible for both primary and special servicing so the recent announcement has no effect on these transactions.

While Rooftop is the named servicer on the three Mansard transactions, mortgage administration has been outsourced to Crown for Mansard Mortgages 2006-1 plc and Mansard Mortgages 2007-1 plc while Vertex Mortgage Services is primary servicer for Mansard Mortgages 2007-2 plc.

Vertex is also the named back-up servicer on the first two Mansard deals.

As there will be no new origination business from Rooftop, the growth of the special servicing portfolio is based solely on increasing arrears and defaults within the existing portfolios.

While the closing of Rooftop’s lending platform does not have immediate impact on the ratings of the RMBS transactions, the Mansard deals specially serviced by Rooftop could experience some operational performance issues in the long-term.

For these securities however there has been another servicer named to take over should an administrator be appointed and the need arise.

The situation at Rooftop may lead to higher staff turnover through voluntary staff departures or forced redundancies as the portfolios decrease due to redemptions and the disposal of defaulted assets.


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