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GMAC-RFC servicing transfer will not affect rating

Fitch Ratings says the recent announcement that GMAC-RFC will transfer loans administered by Homeloan Management Limited back in-house will not impact HML’s UK servicer ratings.

On November 29 2010, Fitch affirmed HML’s residential mortgage primary servicer ratings at ’RPS2+(prime)’ and ’RPS2+(sub-prime)’, and upgraded the special servicer rating to ’RSS3+’.

Fitch also notes that the impact of the servicing transfer on the performance of GMAC-RFC’s UK RMBS transactions is expected to be minimal, although the agency will continue to monitor the situation and take rating action if necessary.

The GMAC-RFC portfolio represents approximately 8% of HML’s total servicing portfolio.

Fitch believes the loss of the portfolio will not adversely affect HML from an operational perspective given that HML has dedicated staff working on the GMAC portfolio.

Furthermore, the transfer does not affect HML’s servicing activities relating to its remaining portfolio of over 358,000 loans £40bn from 32 clients.

Fitch further notes that the impact on HML’s financial condition is limited given the declining nature of GMAC-RFC’s portfolio, HML’s considerably lower cost to service per loan compared to rated peers and the continued financial support provided by its parent company, Skipton Building Society (rated ’A-’/Stable/’F2’).

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