Fitch Affirms Wells Fargo Bank, N.A.'S U.S. Resi Master Servicer Rating

Fitch Ratings affirms Wells Fargo Bank's (WFB) U.S. residential master servicer rating at 'RMS1'. The rating action is based on the company's robust master servicing oversight program, experienced master servicer transition management team, and enhanced data collection processes. The rating also reflects the strong management experience and expanded staff cross training programs. In addition, the rating action reflects the financial strength of its parent Wells Fargo & Co. (WF&C) which is rated 'AA-/F1+' Rating Outlook Stable, by Fitch.

Wells Fargo's master servicing operations are headquartered in Columbia, MD, with additional sites in Frederick, MD, Houston, TX and Minneapolis, MN. Wells Fargo and its predecessor have master serviced residential mortgage loans since 1988 and is part of the Corporate Trust Services (CTS) that falls under the Wholesale Banking Division of Wells Fargo Bank, N.A.

WFB is a leading master servicer of mortgage-backed securities (MBS) and as of June 30, 2011, master serviced 1,808,279 loans totaling $399.8 billion. This was down from 2,113,795 loans totaling $476.8 billion as of the last review period. The portfolio consisted of 1,380,749 non-agency RMBS loans totaling $353.3 billion and 427,500 GSE/FHLB totaling $46.4 billion.

Fitch Believes Wells Fargo Bank's master servicing platform has the competency, infrastructure and capacity to meet the challenges of the changing master servicing environment. However, Fitch will monitor Wells Fargo's ability to maintain oversight of its' primary servicers in this high default environment.

In November 2010, Fitch assigned a Negative Outlook for the entire U.S. Residential Mortgage Servicer ratings sector on increased concerns surrounding alleged procedural defects in the judicial foreclosure process. Responses to Fitch's survey of its rated servicers regarding internal procedures used to verify and execute foreclosure affidavits indicated that all servicers are taking this matter seriously and are continuing to work to resolve any issues uncovered. Fitch may place an individual servicer's ratings on Rating Watch Negative and/or downgrade the ratings if the servicer does not make a diligent and timely review of its processes and take immediate corrective action to remediate any foreclosure action or documentation failures. Fitch may take similar actions on a servicer's ratings if the impact of the additional costs that must be borne by the servicer, significantly affect its financial condition. Until those conclusions are reached, the Negative Outlook on the sector affects all U.S. RMBS servicers.

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 and small Balance Commercial Mortgage Servicers', dated Nov. 29, 2006 and 'Global Rating Criteria for Structured Finance Servicers' dated Jan. 31, 2011, which is available on the Fitch Ratings web site at 'www.fitchratings.com'.

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:

--'Global Rating Criteria for Structured Finance Servicers' (Aug. 13, 2010);

--'Rating U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria'

(Jan. 31, 2011).

Applicable Criteria and Related Research:

Global Rating Criteria for Structured Finance Servicers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=547305

U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065

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