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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 was assigned additional servicer ratings by rating agency Fitch 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.  

About Author: Radhika Ojha

Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.

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