First Horizon Home Loan Corp. received upgraded servicer ratings on Alt-A and home equity loans.
Fitch Ratings announced it bumped up the Irving, Texas-based lender's residential primary servicer rating on the Alt-A and home equity product to 'RPS2' from 'RSP2-'.
The ratings agency also affirmed the subsidiary of First Tennessee Bank maintained a rating for prime product at 'RSP2'.
Fitch says it rates primary, master and special residential mortgage servicers on a scale of 1 to 5 (with 1 being the highest rating) and further differentiates the evaluations with plus, minus, and the flat rating.
Fitch's actions were reportedly based on First Horizon's experienced management team, effective internal control environment and the financial strength of its parent company. The results also reflected the lender's loan administration and collection procedures for first and second mortgages.
The 20-year old residential originator serviced $1.1 billion in Alt-A mortgages and $567.6 million in second mortgages as of July 31, 2004. For the same period, it serviced 524,144 prime first mortgages, according to Fitch.
In the past year, First Horizon has focused its efforts on a nationwide expansion to deliver broader financial services including equity lending, and it initiated various technology improvements to leverage its scalable servicing platform and enhance productivity in its servicing operations, Fitch said. The mortgage company also continued to manage its portfolio with solid collateral performance.
The ratings agency added that it "believes that First Horizon will remain a solid servicer of prime, Alt-A and home equity product, and will continue to monitor First Horizon's progress in effectively maintaining a balanced, well-controlled servicing environment while pursuing its growth initiatives."