09.11.2012 23:23
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Moody's: Sub-servicing transfer to Select Portfolio Servicing, Inc. from Bank of America, N.A. has no negative ratings impact on Forty-One US RMBS transactions

New York, November 09, 2012 -- Moody's Investors Service ("Moody's") stated today that the appointment by Bank of America, N.A. ("BOA") of Select Portfolio Servicing, Inc. ("SPS") as a sub-servicer for certain loans backing 41 US RMBS transactions will not, in and of itself and at this time, result in a reduction or withdrawal of the current ratings on the securities issued by these transactions.

BOA has requested that Moody's provide its opinion on whether the ratings on the securities issued by the affected transactions would be downgraded or withdrawn as a result of the transactions having the servicing of some, but not all loans transferred to SPS from BOA by way of sub-servicing. BOA has chosen SPS to sub-service approximately 16,367 loans within the transactions listed below, commencing on November 30, 2012, with additional 527 loans to be transferred to SPS on December 15, 2012. As the sub-servicer, SPS will not own the servicing rights to the loans that are transferred from BOA.

In determining the credit impact of the transfer of servicing to SPS, Moody's reviewed i) SPS's servicing metrics ii) the affected transactions' sensitivity to cash flow disruptions due to changes in servicing and modification practices, and iii) SPS's ability to handle the proposed transfer.

Moody's view is based primarily on its opinion that: a) the ratings of each of the securities in the affected transactions will not have material negative implication following changes in servicing strategy that can occur after the transfer; b) SPS is a stronger servicer than BOA as evidenced by Moody's SQ assessment, and c) SPS is adequately prepared to handle the transfer and continue servicing the loans in the affected transactions listed above. SPS is assessed at SQ2+ as a primary servicer of subprime residential mortgage loans and as a special servicer of residential mortgage loans. BOA is assessed at SQ3+ as a primary servicer of subprime residential mortgage loans and SQ3 as a special servicer of residential mortgage loans. SPS is also assessed higher in the collections, loss mitigation and timeline management subcategories than BOA.

Moody's opinion addresses only the current impact on Moody's ratings, and it does not express an opinion as to whether the transfer of servicing rights has or could have any other effects that investors may or may not view positively.

The methodologies used in assessing the credit impact of the servicing transfer was "Moody's Approach to Rating Residential Mortgage Servicers" published in January 2001, "Updated Moody's Servicer Quality Rating Scale and Definitions" published in May 2005, "Proposal to Update Moody's Approach To Servicer Quality (SQ) Assessment For U.S. Primary Residential Mortgage Servicers" published in July 2012, "Pre-2005 US RMBS Surveillance Methodology" published January 2012, "US RMBS Surveillance Methodology for Scratch and Dent" published in May 2011, and " 2005-2008 US RMBS Surveillance Methodology" published in July 2011. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Affected Transactions: Alt-A Collateral GSC Capital Corp.Mortgage Trust 2006-1

GSC Capital Corp.Mortgage Trust 2006-2

Scratch & Dent Collateral

Merrill Lynch Mortgage Investors Trust Series 2006-SD1

CWABS Asset-Backed Certificates Trust 2006-QH2

Subprime Collateral

Merrill Lynch Mortgage Investors, Inc. 2005-WMC1

First Franklin Mortgage Loan Trust 2005-FFH1

Specialty Underwriting and Residential Finance Trust, Series 2005-BC2

First Franklin Mortgage Loan Trust 2005-FF7

Specialty Underwriting and Residential Finance Series 2005-AB2

Merrill Lynch Mortgage Investors Trust 2005-AR1

Specialty Underwriting and Residential Finance 2005-AB3

Specialty Underwriting and Residential Finance Series 2005-BC4

Merrill Lynch Mortgage Investors Trust 2006-WMC1

Merrill Lynch Mortgage Investors Trust Series 2006-HE1

Specialty Underwriting and Residential Finance Series 2006-BC1

Specialty Underwriting and Residential Finance Series 2006-AB1

Merrill Lynch Mortgage Investors Trust 2006-RM1

Specialty Underwriting and Residential Finance 2006-BC2

Merrill Lynch Mortgage Investors Trust 2006-WMC2

Merrill Lynch Mortgage Investors Trust Series 2006-HE2

Merrill Lynch Mortgage Investors Trust 2006-AR1

Specialty Underwriting and Residential Finance Series 2006-AB2

Merrill Lynch Mortgage Investors Trust 2006-RM2

Merrill Lynch Mortgage Investors Trust Series 2006-HE3

Merrill Lynch Mortgage Investors Trust 2006-AHL1

Merrill Lynch Mortgage Investors Trust 2006-FM1

Specialty Underwriting and Residential Finance Series 2006-BC3

Merrill Lynch Mortgage Investors Trust Series 2006-HE4

Specialty Underwriting and Residential Finance 2006-AB3

Merrill Lynch Mortgage Investors Trust 2006-MLN1

Merrill Lynch Mortgage Investors Trust Series 2006-HE6

First Franklin Mortgage Loan Trust 2006-FF18

First Franklin Mortgage Loan Trust 2007-FF1

Merrill Lynch Mortgage Investors Trust, Series 2007-HE1

Specialty Underwriting and Residential Finance Trust, Series 2007-AB1

First Franklin Mortgage Loan Trust Mortgage Loan Asset-Backed Certificates, Series 2007-FF2

Merrill Lynch Mortgage Investors Trust Series 2007-HE2

Merrill Lynch Mortgage Investors Trust 2007-MLN1

Merrill Lynch Mortgage Investors Trust Series 2007-HE3

Merrill Lynch Mortgage Investors Trust 2005-FM1

Specialty Underwriting and Residential Finance Series 2006-BC5

Junil Park Associate Analyst Structured Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Amita Shrivastava VP - Senior Credit Officer Structured Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.

Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.

This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.

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