Fitch Affirms National City Bank’s Resi Servicer Rating of ‘RPS2+’

Fitch Ratings has affirmed National City Bank’s (NCB, formerly National City Mortgage Co., NCM) U.S. residential servicer ratings as follows:

These rating actions reflect NCB’s experienced management team, comprehensive controls, and proficient loan administration practices. The ratings also reflect its financial strength (rated ‘A-/F2′, Rating Watch Positive, by Fitch). The servicer ratings were formerly assigned to NCM, which was merged into NCB on Oct. 1, 2008. Servicing rights were transferred to a newly created entity, National City Mortgage Services, Inc. (NCMSI), which entered into a subservicing agreement with NCB to perform the servicing functions.

As of June 30, 2008, NCB’s servicing portfolio consisted of approximately 1.16 million loans totaling $189.3 billion. This included over 67,000 non-agency prime loans totaling $30.7 billion, and over 48,200 ALT-A loans totaling $11.1 billion. Since Fitch’s prior review, management indicated that NCB’s default department will be centralized around processes resulting in employees performing functions across multiple products, including non-mortgage products, in an effort to leverage economies of scale. In addition, NCB started outsourcing certain back office processes to a vendor with operations in India, including document audits and trailing document follow-up; new loan audits; tax and insurance set-up; escrow processing, research, and analysis; and lien releases. Also, on Oct. 24, 2008, PNC Financial Services Group, Inc.’s (PNC) announced it had entered into a definitive agreement to acquire National City Corporation (NCC), the parent of NCB, in a transaction that is expected to close prior to year-end 2008.

Fitch believes that NCB is a capable servicer with extensive systems, experienced and well-trained staff, and robust processes and controls in place. However, Fitch will continue to monitor the company’s ability to maintain servicing and operational performance in the current challenging market, as well as its potential acquisition by PNC.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch’s residential servicer rating program, please see Fitch’s report ‘Rating U.S. Residential Mortgage Servicers’, dated Nov. 29, 2006, which is available on the Fitch Ratings web site at www.fitchratings.com.

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.