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Fitch Gives Ocwen ‘Stable’ Rating

TechnologyThe outlook for Ocwen Loan Servicing’s residential mortgage products is positive, as Fitch Ratings has just deemed all seven product lines “stable.”

According to Fitch, Ocwen’s prime, Alt-A, subprime, HELOC, closed-end second lien, RSS3, and RMS3 products all received “Outlook Stable” ratings. The results are a result of Ocwen’s continued efforts to “work through regulatory settlements,” according to Fitch’s release on the matter, as well as several other factors.

In February, Ocwen reached a settlement with the California Department of Business Oversight. The company is also working through regulatory issues with the New York Department of Financial Services and the National Mortgage Settlement. According to a 10K report filed last month, Ocwen is also preparing for a potential $12.5 million-dollar settlement with the Consumer Financial Protection Bureau.

In addition to the company’s movement on regulatory issues, Fitch also cited improvements in Ocwen’s overall servicing operations as a factor in the latest ratings.

“Ocwen continues to make incremental improvements and enhancements to its primary and special servicing operations,” Fitch’s release stated. “Since the prior review, the company transitioned to a new lock-box vendor, streamlined its investor reporting for PLS deals, updated its servicing transfer processes, and consolidated correspondence management.”

The organization’s technological advances—what Fitch called a “highly integrated technology environment”—also played a role in the ratings.

“Ocwen's highly integrated systems result in an enhanced technology environment,” the release stated. “The company leverages a number of systems from Altisource Portfolio Solutions S.A. (Altisource), including its core servicing system REALServicing, and Equator, a default servicing platform. Since Fitch's prior review, Ocwen implemented Back in The Black for loss mitigation processing.”

Fitch’s latest residential servicer ratings also factor in Reg Ab and USAP results, which show no incompliance.

“The most recent Reg AB and USAP reports for the master servicing operation did not contain any instances of material noncompliance,” Fitch reported. “Master servicing has reported no instances of material non-compliance with Reg AB or USAP requirements for the past eight years.”

In June 2016, Fitch gave Ocwen a “B- / stable” long-term default rating. The company currently services a portfolio of 1.36 million loans, totaling more than $203 billion.

To learn more about Ocwen’s ratings, visit FitchRatings.com [1].