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Fitch Affirms Bank of America's U.S. RMBS Servicer Ratings; Outlook Revised to Stable

  Fitch Affirms Bank of America's U.S. RMBS Servicer Ratings; Outlook Revised   to Stable  Business Wire  NEW YORK -- March 28, 2014  Fitch Ratings has affirmed the following residential mortgage servicer ratings on Bank of America, N.A. (BANA) U.S., and revised their Rating Outlooks to Stable from Negative:  --Primary servicer rating for Prime product at 'RPS2-' Outlook Stable;  --Primary servicer rating for Alt-A product at 'RPS2-', Outlook Stable;  --Primary servicer rating for HELOC product at 'RPS2-', Outlook Stable;  --Primary servicer rating for Subprime product at 'RPS2-', Outlook Stable;  --Primary servicer rating for Second Lien product at 'RPS2-, Outlook Stable;  --Special servicer rating at 'RSS2-', Outlook Stable.  The rating actions reflect significant improvement in BANA's internal audit results, and reduction in Regulation AB (Reg AB) instances of material non-compliance and Uniform Mortgage Bankers Single Attestation Program for Mortgage Bankers (USAP) findings from the prior review. The rating actions also reflect BANA's continued investment in technology and enhancements to its internal control environment. In addition, the ratings incorporate the company's financial condition. BANA is rated 'A' with a Negative Outlook by Fitch. A company's financial condition is a component of Fitch's servicer rating analysis.  Finally, the ratings also reflect Fitch's overall 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 mandated by regulators and other parties.  Since Fitch's prior review, BANA has made substantial progress in reducing its defaulted loan portfolio through mortgage servicing rights (MSR) sales, allowing the company to focus on re-aligning its mortgage servicing operations while consolidating sites.  As of Dec. 31, 2013, BANA's mortgage servicing portfolio was composed of 6,204,596 loans totaling $817.2 billion, a decrease from 9,568,687 loans totaling $1.3 trillion as of the prior year end. The total servicing portfolio included 11.5% non-agency first lien prime product, 1% first lien Alt-A product, 2.3% first lien subprime product, 23.8% HELOC product, and 5.7% closed-end second lien product based on loan count. BANA's special servicing portfolio consisted of 6,750 loans totaling $330.7 million.  BANA continues to invest in technology and operational initiatives. During the current review period, the company focused on support for compliance with CFPB and NMS servicing standards, and implemented over 170 CFPB related changes. BANA stated that overall it is substantially compliant with all CFPB requirements. The company also expanded its quality control (QC) resources and the scope of testing. QC reviews cover high-risk processes and key controls, and include testing related to GSEs, investors, insurers, treasury and settlements as well as sub-servicers.  Fitch will continue to monitor BANA's ability to maintain performance as it pursues its servicing initiatives in this high delinquency environment.  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 Servicer Rating Criteria', 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'.  Applicable Criteria and Related Research:  --'Global Rating Criteria for Structured Finance Servicers' (Aug. 13, 2010);  --'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating' (Jan. 31, 2011).  Applicable Criteria and Related Research:  Rating Criteria for Structured Finance Servicers  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731750  U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria -- Effective January 31, 2011 to January 30, 2014  http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=600065  Additional Disclosure  Solicitation Status  http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=825523  ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.  Contact:  Fitch Ratings Primary Analyst Thomas Crowe, +1-212-908-0227 Senior Director Fitch Ratings, Inc. One State Street Plaza New York, NY 10004 or Secondary Analyst Roelof Slump, +1-212-908-0705 Managing Director or Committee Chairperson Vanessa Purwin, +1-212-908-0269 Senior Director or Media Relations Sandro Scenga, +1-212-908-0278 (New York) sandro.scenga@fitchratings.com