Fitch Ratings Affirms EMC's 'RPS1' & 'RSS1' Servicer Ratings

NEW YORK--(BUSINESS WIRE)--July 9, 2003--Fitch Ratings affirms EMC Mortgage Corp.'s (EMC) 'RPS1' residential primary servicer rating for subprime product and 'RSS1' special servicer rating. The primary servicer rating is based on EMC's seasoned leadership, expanded training programs, upgraded technology, and enhanced internal controls. The special servicer rating is based on EMC's ability to effectively manage and liquidate non-performing residential mortgage loans and real estate owned (REO) assets. In addition, the ratings reflect the solid financial backing of EMC's parent, The Bear Stearns Cos., Inc.

Located in Irving, TX, EMC continues to augment its internal control environment to provide additional focus on key servicing functions. EMC is committed to enhancing its compliance and internal control methodologies to further support quality processes, improved default timeline management and customer service. Over the past twelve months, EMC has instituted a number of process improvements, enhanced its technology and expanded its management reporting resulting in improved data integrity, better internal controls, streamlined processes and increased due diligence. In addition, EMC continues to expand its training programs to accommodate the staffing needs of its growing portfolio. As of Feb. 28, 2003, EMC serviced more than 170,000 loans totaling approximately $11 billion, of which $5.2 billion were subprime loans.

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Fitch's review of EMC's servicing operations confirmed that the company has continued to develop and improve its servicing platform to support its growth strategy with emphasis on strong compliance processes and internal controls. However, Fitch will continue to closely monitor EMC's ability to maintain performance while managing its recent and planned growth initiatives.

Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within each 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, 'Residential Mortgage Servicer Ratings', dated Feb. 21, 2003 and available on the Fitch Ratings web site at 'www.fitchratings.com'.