A mortgage servicing subsidiary of Bank of America Corp. saw its servicer ratings downgraded over high executive turnover and increased use of contract employees.
Wilshire Credit Corp.’s servicer quality ratings for first lien subprime mortgages was downgraded to SQ2- from SQ2+ by Moody’s Investors Service, a news release today said.
Servicers are rated on a scale where SQ1+ is the best possible rating and SQ5- is the worst.
Wilshire’s servicer quality ratings for second liens and first-lien prime loans, as well as its special servicer rating, were similarly lowered.
Moody’s cited a deterioration in call center metrics, management turnover and staffing concerns in its decision to cut the servicer’s rating. The call center metrics worsened because of a hiring freeze that forced the company to utilize more contract employees.
BoA, Wilshire’s parent company, inherited the unit through its December 2008 acquisition of Merrill Lynch & Co. In October, BoA agreed to sell the servicer to IBM’s Lender Business Process Services Inc.
Moody’s announcement indicated the sale is expected to close by March 2010.
Wilshire serviced 136,369 loans for $18.9 billion as of April 30, Moody’s said.
