Residential Capital LLC (ResCap) says it has been in discussions with Moody's with respect to the company's serviced residential mortgage-backed securities (RMBS) rated Baa3 and higher, and is ‘currently taking measures to address [Moody's] concerns regarding the practice of netting cashflows of multiple RMBS deals in a shared custodial bank account.’
ResCap is in the process of separating the trusts into individual custodial bank accounts, which the company believes will resolve any issues. ResCap says it has presented this change to Moody's and is awaiting the agency's review.
Last week, Moody's announced it was reviewing for possible downgrade more than 500 tranches from 125 deals of GMAC-serviced RMBS due to its concerns regarding ResCap's commingling and netting of cashflows of multiple RMBS deals in a shared custodial account.
SOURCE: GMAC Financial Services