Moody’s Lowers Ocwen’s Special Servicer Rating

Moody’s Investors Service has downgraded Ocwen Loan Servicing’s rating as a special servicer to ‘SQ2-‘ from ‘SQ2’.

The company’s rating of ‘SQ2-‘ as a primary servicer of subprime residential mortgage loans remains the same, although both ratings are still on review for possible downgrade.

The downgrade of the special servicer rating as well as the review for downgrade for the special servicer and the subprime servicer ratings are based on concerns that Moody’s raised.

The rating agency is worried about the rapid growth of the firm’s servicing portfolio and the challenges that it faces in integrating the acquired servicing platforms. Moody’s is also concerned about Ocwen’s ability to manage the added distressed loan portfolios.

Moody’s said that maintaining servicing quality might be a challenge for Ocwen as it scales up its operations. This involves hiring default and other mortgage servicing personnel as a response to the firm’s multiple mortgage portfolio acquisitions.

Most of the growth in the firm’s servicing operations will happen in its captive sites located in India and Uruguay, where most of the servicing staff is based, according to Moody’s.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_556/moody-lowers-ocwen-rating-1029314-1.html

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