Moody's Continues Review of Ocwen Loan Servicing Servicers Assessments

January 22, 2014 2:10 PM EST
Moody's maintains its servicer quality (SQ) assessments of SQ2- on Ocwen Loan Servicing, LLC as a primary and special servicer of subprime residential mortgage loans, but continues to review the servicer assessments for downgrade given the rapid growth of its servicing portfolio, according to a new report from Moody's Investors Service.

Thus far, Ocwen's (NYSE: OCN) servicer quality metrics have remained stable. The growth in its portfolio has not led to a decline in its collection or loan administration abilities. In addition, its loss mitigation efforts are strong and result in a high level of modifications and re-modifications.

However, continued growth could stress Ocwen's abilities to service loans. "In 2013, Ocwen added almost 2.8 million loans to its servicing portfolio," says Moody's Assistant Vice President and Analyst Gene Berman. "It could be a challenge for Ocwen to maintain servicing quality as it scales its operations so quickly."

In addition, Ocwen purchased mortgage servicing assets from OneWest Bank, FSB that has grown its servicing portfolio to over $518 billion, a significant increase from the $55 billion in assets that Ocwen serviced as of mid-2010.

"Integrating OneWest's servicing platforms and managing the additional loan portfolios could also stress Ocwen's resources and ability to service loans," added Berman.

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