NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has placed Homeward Residential's U.S. residential mortgage servicer ratings on Rating Watch Negative, removing the Positive Outlook, as follows:
--Primary servicer rating for Prime product at 'RPS2-';
--Primary servicer rating for Alt-A product at 'RPS2-';
--Primary servicer rating for subprime product at 'RPS2-';
--Primary specialty servicer rating for closed-end second liens product at 'RPS2-';
--Residential special servicer rating 'RSS2-'.
The Rating Watch Negative is based on concerns arising from the proposed acquisition of Homeward by Ocwen Loan Servicing, LLC. (Ocwen), which was announced on Oct. 3, 2012 and is expected to close by year end 2012. Fitch anticipates that if the transaction proceeds to closing as expected, the Homeward servicer ratings would be either withdrawn or be no higher than those held by Ocwen. Ocwen's U.S. residential primary and special servicer ratings are 'RPS3' and 'RSS3', respectively, and are also being placed on Watch Negative, as of Oct. 4, 2012.
Homeward operates from offices located in Coppell, TX and Jacksonville, FL. In addition,the company has captive offshore operations in Pune, India. In February 2012, the servicer added a new office located in Addison, TX.
As of June 30 2012, Homeward's portfolio comprised 410,713 loans with an unpaid principal balance (UPB) of $74.1 billion, of which 77% are non-agency RMBS transactions. As of June 30, 2012, Ocwen's portfolio comprised 789,712 residential loans with an UPB of $122.5 billion of which 81% are non-agency RMBS transactions.
In addition to the rating actions on Homeward's servicer ratings, further rating action may be taken on outstanding RMBS transactions currently serviced by Homeward. Fitch will continue to monitor the acquisition and perform further analysis to determine the final ratings impact on the affected bonds.
The Negative Outlook on the U.S. Residential Mortgage Servicer ratings sector remains. On Nov. 4, 2010, Fitch assigned a Negative Outlook for the entire sector on increased concerns surrounding alleged procedural defects in the judicial foreclosure process.
Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's report 'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria,' dated Jan. 31, 2011, and 'Global Rating Criteria for Structured Finance Servicers,' dated Aug. 16, 2010, both available on the Fitch web site at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria & Related Research:
--'U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria' (Jan. 31, 2011);
--'Global Rating Criteria for Structured Finance Servicers" (Aug. 16, 2010).
Applicable Criteria and Related Research:
Global Rating Criteria for Structured Finance CDOs
U.S. Residential and Small Balance Commercial Mortgage Servicer Rating Criteria
Michael Laidlaw, +1-212-908-0251
One State Street Plaza
New York, NY 10004
Diane Pendley, +1-212-908-0777
Roelof Slump, +1-212-908-0705
Sandro Scenga, New York, +1-212-908-0278
Source: Fitch Ratings