New Subservicer Rating Assesses Spectrum of Loan Types.

NEW YORK -- GMAC Mortgage, the nation's second largest subservicer of home loans, has received Fitch Ratings first "subservicer rating" and the company got the top grade of "RPS1" from Fitch.

So what is a subservicer rating and how is it different from an ordinary old servicer rating?

Tom Donatacci, senior vice president of business development at GMAC Mortgage, said the distinction is important because of the volume of loans being originated today that go not to Fannie Mae and Freddie Mac but to private-label securities, increasing the number of investor requirements a servicer has to manage and driving demand for subservicing expertise.

Investors look to an accredited servicer to stand behind the performance of the loan assets over the long term, especially when the housing markets become stressed, he told National Mortgage News. When servicing is performed by a subservicer, that concern about the quality of cash management, investor reporting and collections extends to the company that actually performs those functions.

And with home price appreciation slowing, more attention than ever before is being paid to loan servicing quality. In addition, rising rates and more complicated loan assets also are driving interest in servicer quality and increased servicer surveillance from investors and conduits.

"It's in that set of market circumstances ...