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Fitch Assigns Additional Servicer Ratings for PHH

After being assigned an RPS3 rating as a residential primary servicer for its prime product in August, PHH Mortgage [1] was assigned additional servicer ratings by rating agency Fitch [2] on Monday. Fitch said that the servicer's assigned ratings and Stable Outlook reflected the company's experienced senior management staff, enterprise-wide risk environment, compliance protocols and investments in its servicing technology.

The additional RPS 3 U.S. residential primary servicer rating was given to PHH for its Alt-A, subprime, and HELOC products as well as for being a special servicer and its specialty closed-end second lien operations.

According to Fitch, it reviewed PHH's financial statements to provide an internal assessment as a company's financial condition is one of the components on which Fitch servicer ratings are analyzed.

"PHH has a robust enterprise risk management hierarchy in place with multiple components embedded in the framework to identify, monitor, and address risk including proactive change management processes, quality assurance, and quality control protocols and a multi-dimensional testing program," Fitch said. "PHH utilizes a hybrid model for internal audit where oversight is retained among a small group of auditors internally and the bulk of audit work is co-sourced to a third party auditing firm."

In February 2018, the company announced its planned merger with Ocwen Financial Corp. "The companies are currently targeting closing the transaction in the third quarter of 2018. The merger includes migrating Ocwen's loan portfolio from its legacy proprietary system onto PHH's system, which utilizes Black Knight Mortgage Processing Solutions (BKMPS) and LoanSphere Mortgage Servicing Package (MSP)," a statement from Fitch said, adding that the rating agency believed that the potential synergies realized with the merger, including an enhanced technology environment, best practices developed for compliance, audit, and loan servicing processes, as well as multi-layered disaster recovery and business continuity contingencies, could prove beneficial if developed properly in the resulting single entity.