A mortgage servicer rating for an Ally Financial Inc. unit has been placed on ratings watch due to liquidity concerns.
Impacted by the warning was the residential mortgage master servicer rating of GMAC-RFC LLC.
The unit is a subsidiary of Residential Capital LLC.
Fitch Ratings has ResCap’s rating at RMS3 on a scale where RMS1+ is the strongest rating and RMS5- is the weakest.
Fitch said that the “rating watch negative” action is the result of the weakening financial condition of ResCap.
“The servicer rating actions reflect the continued pressure on ResCap’s liquidity position and financial flexibility and the potential impact on the company’s servicing operations,” according to Fitch. “A company’s financial condition is an important component of Fitch’s servicer rating analysis.”
Ally Financial disclosed this week that subsidiary ResCap missed a semi-annual interest payment that was due April 17 on indenture notes with a remaining principal balance of around $473 million. But the missed payments don’t become an “event of default” unless the default continues for at least 30 days.
