Standard & Poor's put Source One Mortgage Services Corp. on CreditWatch with negative implications.

Charles Titterton, an analyst with Standard & Poor's, cited the company's poor earnings performance and decision to sell a large portion of its servicing as reasons for placing Source One on CreditWatch.

The company sold $17 billion of servicing to Chase Manhattan Mortgage earlier this year but is subservicing the loans for at least a year. Mr. Titterton said there is concern over whether or not Chase will renew the subservicing contract with Source One.

"I'm not sure what the strategy of the company is going to be in respect of rebuilding servicing," he said.

Earlier this month, Moody's Investors Service downgraded its ratings on four types of Source One securities for similar reasons.

Source One's parent company, Fund American Enterprises, tried and failed to sell the company in 1994 and 1996. Source One is not on the block now but Mr. Titterton said Fund American would consider a sale if a buyer offered an appropriate price.

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