Fitch drops ResCap

Fitch Ratings said it downgraded Residential Capital LLC long-term issuer default rating to BB- from BB+.

In addition, the ratings remain on rating watch negative by Fitch.

The agency said that this action follows ResCap's extremely difficult 2007 and uncertain prospects for 2008.

While ResCap has aggressively addressed near-term liquidity issues, the company's return to even a modicum of sustainable profitability in 2008 would be difficult if mortgage market dislocation continues, Fitch added.

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