|The company that now operates the former servicing platform of New Century Financial Corp. saw its servicer rating upgraded.
Fitch Ratings announced yesterday that Carrington Mortgage Services LLC's residential primary servicer rating for subprime loans was upgraded to RPS3- from RPS4. Fitch uses a scale of one to five, with one being the most favorable. Plus and minus signs further differentiate the ratings.
The action reflects Carrington's effective loan administration, improved control environment and focused default management practices. Fitch noted that since its last review, an internal audit program has been established, policies and procedures have been re-written and critical systems have been backed up.
In May 2007, Carrington and parent Carrington Capital Management LLC won a bankruptcy bid to acquire New Century's loan servicing operations for $188 million. That operation, based in Santa Ana, Calif., had been stabilized and integrated as of Fitch's current review.
Carrington agreed in April to acquire $1.9 billion in mortgage servicing rights from Fremont Investment & Loan.
Fitch said Carrington's servicing portfolio was 86,400 loans for more than $16 billion as of June 30. More than 93 percent of the portfolio is subprime and 7 percent is second lien.
"Fitch believes that CMS maintains a scalable servicing platform with an experienced management team, adequate technology, focused procedures, and controls in place to support its current servicing portfolio," the announcement said.