Fitch: Ocwen/HLSS Relationship Remains Focus in U.S. RMBS Servicer Advancing

NEW YORK--(BUSINESS WIRE)-- RMBS servicing advance rates increased slightly in the fourth quarter of 2014 (4Q'14), according to Fitch Ratings in its most recent quarterly U.S. RMBS Servicer Index Report released today. While bank servicer advance rates have steadily declined over time, some nonbank servicers, and especially Ocwen, gradually increasing their advance rates as economic conditions and housing market improvements became evident. Since Ocwen services a large portfolio of delinquent loans, including 45% of the RMBS subprime sector, the increases in their advance rates notably impacted the total nonbank and overall RMBS figures.

Loans being serviced by Ocwen saw an increase in advance rates by more than 10% in the 15 months ending Dec. 31, 2014, while other servicing entities declined by approximately 2% over this same time period. In 2015, overall advancing trends may be further impacted by Ocwen's advancing policies and the approaches taken by its contractual partner Home Loan Servicing Solutions Ltd (HLSS) which owns rights to the majority of the mortgage servicing rights on Ocwen serviced RMBS product and the associated advancing responsibility.

Fitch's latest quarterly U.S. RMBS servicer index report represents the eighth in this series. In addition to the portfolio mix observations, the report highlights the following:

--Regulation remains as a main focus for mortgage servicers;

--Declines in the size of Ocwen's servicing portfolio are becoming evident;

--Modification volumes increased in 4Q'14;

--Banks evidenced continued declines in their delinquency statistics, while nonbanks showed a reduction in delinquencies in 4Q'14 after an increase in 3Q'14.

Fitch's servicer index report provides a quarterly overview of the servicing sector and industry observations, and includes a focus on non-agency servicer trends. The report also highlights differences between bank and nonbank servicers for delinquency, liquidation timelines and loss mitigation efforts.

The servicer index report is available at 'www.fitchratings.com' or by clicking the above link.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: RMBS Servicing Index -- U.S.A.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864062

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Fitch Ratings
Roelof Slump, +1-212-908-0705
Managing Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Zoya Ramzanali, +1-212-612-7796
Associate Analyst
or
Sandro Scenga, +1-212-908-0278
Media Relations, New York
[email protected]

Source: Fitch Ratings

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