TEXT-S&P monitoring Nationstar on ResCap acquisition plans
May 21 - Standard & Poor's Ratings Services said today that it is monitoring the servicing operation of Nationstar Mortgage LLC (Nationstar) following its May 14 announcement that it intends to acquire Residential Capital LLC (ResCap), the servicing subsidiary of Ally Financial. Standard & Poor's currently maintains an ABOVE AVERAGE ranking on Nationstar as a residential subprime servicer. Nationstar made its announcement on the same day that ResCap filed a voluntary Chapter 11 bankruptcy petition and announced it was seeking to sell its mortgage servicing assets in a court-supervised auction. In March 2012, Nationstar announced its acquisition of Aurora Loan Services LLC (Aurora), the servicing subsidiary of Aurora Bank FSB. Standard & Poor's will be analyzing the transition plans for ResCap's mortgage subsidiary, GMAC Mortgage LLC (GMACM), and its residential servicing operation, based on discussions with Nationstar's management. We will then assess consolidation plans, if any, for all loan servicing operations, including default management, loss mitigation, and foreclosure administration, of the combined portfolios. Standard & Poor's lowered its residential prime, subprime, special, and subordinate-lien mortgage loan servicer rankings on GMACM to AVERAGE from ABOVE AVERAGE on May 4 and assigned a negative outlook to the rankings. We also affirmed our ABOVE AVERAGE master servicer ranking on GMAC Residential Funding Co. LLC, which is a subsidiary of ResCap, on Dec. 5, 2011. Nationstar indicated that its intent is to purchase ResCap's servicing operations, including the facilities and personnel that are appropriate to maintain the operation. Such a purchase would include the infrastructure to support the prime, special, subordinate-lien, and master serving rankings assigned to GMACM and Aurora. Nationstar currently services prime, subordinate-lien, and special loans, but does not have rankings from Standard & Poor's for these operations. Standard & Poor's will continue to monitor Nationstar's servicing platform in accordance with published criteria and we will assess and revise our servicer rankings as we deem appropriate.
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