NATIONAL MORTGAGE NEWS - August 2, 2007
Moody's Downgrades Litton Servicer Ratings
Moody's Investors Service has downgraded the servicer ratings of Litton Loan Servicing LP from SQ1 to SQ2 as a primary servicer of subprime residential mortgage loans and of second-lien residential mortgage loans, and as a special servicer. Moody's also downgraded Litton's rating as a primary servicer of manufactured housing loans from SQ2-minus to SQ3, and placed its servicer-quality ratings on review for possible downgrade. The actions were based on the announcement that Litton's parent, Credit-Based Asset Servicing and Securitization LLC, is experiencing liquidity problems due to an "unprecedented amount of margin calls" from its lenders, the rating agency said. Moody's reduced the company's servicing stability from above average to below average. (For the MH rating, the servicing stability rating was reduced from average to below average.) Moody's rates servicers on a scale of SQ1 (strong) to SQ5 (weak).