TEXT-Fitch affirms Wells Fargo's servicer ratings

Wed Dec 19, 2012 5:10pm EST

Dec 19 - Fitch Ratings takes the following rating actions on the U.S.
residential primary servicer ratings for Wells Fargo Home Mortgage (WFHM), a
division of Wells Fargo Bank, N.A., and assigns them a Stable Rating Outlook:

--Residential primary servicer rating for Prime product affirmed at 'RPS1-'
Outlook Stable;
--Residential primary servicer rating for Alt-A product affirmed at 'RPS1-'
Outlook Stable;
--Residential primary servicer rating for Subprime product affirmed at 'RPS1-'
Outlook Stable.

WFHM's servicer ratings affirmation and assignment of a Stable Outlook reflect
the continued enhancements to operational risk and expanded procedural controls
that were implemented during the year. In addition, WFHM rolled out new-hire
training and annual certification programs for its single point of contact
representatives while developing management reports and measures for the
performance monitoring and incentive programs.

The ratings also reflect the ongoing realignment of various servicing operations
and continued internal promotions and key additions to the senior management
team.

In addition, the ratings reflect the financial strength of its ultimate parent:
Wells Fargo & Company (WFC), rated 'AA-' with a Stable Outlook by Fitch.

WFHM is under signed Consent Orders with both the Federal Reserve and the Office
of the Comptroller of the Currency and the respective attorneys general. The
servicer continued making operational changes to adhere to the new regulations
through the various oversight agencies and attorneys' general settlement. The
servicer was one of five servicers to agree with the April 2012 settlement that
saw the total sum of $25 billion set aside to provide consumer relief,
refinance, and foreclosure assistance programs. The programs will remain in
effect for three and a half years and will be subject to a trailing review
period.

Further, the rating reflects Fitch's overall continued concerns for the U.S.
residential servicing industry, which include the ability to maintain high
performance standards while addressing the rising cost of servicing and changes
to industry practices, which are likely to be further mandated by regulators and
other parties

WFHM is headquartered in Des Moines, IA operating eight servicing/customer
centers and nine specialized loss mitigation centers throughout the U.S. As of
Aug. 30, 2012, WFHM serviced 9,460,335 loans totaling $1.66 trillion, including
approximately 8.08 million agency loans totaling $1.33 trillion, 735,614 prime
loans totaling $229 billion, 17,490 Alt-A loans totaling $4.6 billion and
109,976 subprime loans totaling $16.1 billion. In addition, WFHM serviced
515,000 other loans comprised of manufactured housing (MH) and community
reinvestment act (CRA), third-party servicing and second liens totaling $80.5
billion.

In June 2011, Fitch downgraded the operational risk ratings of several
residential mortgage servicers amidst the growing burden of managing delinquent
and defaulted mortgages in an environment of heightened regulatory scrutiny. The
increased areas of risk identified by various regulatory bodies ultimately
resulted in consent decrees and, the slower than expected pace that institutions
have demonstrated in responding to the foreclosure crisis and implementing
process changes. WFHM's primary servicer ratings were among those downgraded.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings

Applicable Criteria and Related Research:
--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating
Criteria', dated Jan. 31, 2011.

Applicable Criteria and Related Research:
U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
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