Fitch Ratings has placed the residential servicer  ratings for Residential Capital (ResCap) on rating watch negative.

The  Rating  Watch Negative indicates that the rating agency might either downgrade or affirm  ResCap’s  servicer  ratings  depending on the stability of the firm's servicing portfolio, operational capabilities, as well as financial condition.

The rating agency downgraded ResCap’s issuer default rating (IDR) to 'C' from 'BB-'
on May 2 after Rescap announced its debt exchange offer.

Meanwhile,ResCap’s corporate  ratings  remain on Rating Watch Negative pending execution of the  debt  exchange  offer. 

According to Fitch, the  servicer  rating  actions  reflect the continued   pressure   on  ResCap's  liquidity  position  and  financial flexibility. Fitch also considered the  potential  effect  on  the  company’s  servicing operations. 

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