Fitch Ratings Affirms M&T Mortgage Corp's Resi Servicer Rating

Business Wire, July 28, 2005

NEW YORK -- Fitch Ratings affirms M&T Mortgage Corp's (MTMC) 'RPS2' residential primary servicer rating for prime product. The affirmation is based on the company's experienced management team, integrated technology, and effective loan administration policies and procedures. The rating also reflects the financial strength of its parent, Manufacturers and Traders Trust Company (M&T Bank), which is rated 'A-' by Fitch.

Located in Buffalo, NY, MTMC is a wholly owned subsidiary of M&T Bank, a New York chartered commercial bank and subsidiary of M&T Bank Corporation (M&T), with total assets over $52 billion. MTMC originates loans in 48 states and as of March 31, 2005, serviced over 170,000 loans totaling more than $15.7 billion. MTMC's servicing portfolio is composed of approximately 68% prime conforming conventional loans, 18% Alt-A loans, and 14% government loans by loan volume.

MTMC's servicing strategy includes maintaining its servicing portfolio by concentrating on its strategic alliances and leveraging its platform to pursue niche opportunities including GNMA early buyouts, SONYMA loans, and Alt-A product. The company's cost management structure includes actively outsourcing servicing functions where it sees a cost benefit advantage. As a result, MTMC outsources various loan administration and default management functions, in addition to outsourcing its customer service function to the bank's call center.

Since Fitch's last review MTMC continued to refine its servicing platform through operational and technological improvements, which have further enhanced the efficiencies and productivity of the company. Over the past year, the company has implemented a number of automated processes within its loan administration and default management areas to improve its servicing operations. Still, its customer service and collections units faced challenges in the areas of call hold times and abandonment rates related to increased volumes, staffing, and training issues. MTMC management has noted the deficiencies and has taken appropriate action to increase performance with further plans for additional training and a more focused oversight of these functions. Fitch believes MTMC is an effective servicer with reliable systems, efficient processes, and dependable controls. However, Fitch will continue to monitor MTMC's ability to maintain performance while improving its loan administration and default management metrics.

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 (-) symbols, as well as the flat rating. For more information on Fitch's residential servicer rating program, see Fitch's report 'Residential Mortgage Servicer Ratings,' dated Feb. 21, 2003, which is available on the Fitch ratings web site at www.fitchratings.com.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.