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Customer Service Leads to MetLife Downgrade

MetLife Inc.’s mortgage servicing unit had its rating downgraded because of insufficient staffing in customer service. The operation can’t add new office space quickly enough to accommodate the needed growth. Improvement has been noted, however, in the company’s collections department.

MetLife Home Loan’s servicer quality rating was cut to SQ3+ from SQ2-. The downgrade impacts MetLife’s rating for servicing prime mortgages.

The action came Friday from Moody’s Investors Service.

Ratings from Moody’s range from SQ1+, the best assessment available, to the worst possible rating of SQ5-.

Moody’s said that MetLife’s collection abilities, loss-mitigation results, and foreclosure and REO timeline management are all average. Stability assessment is rated above average.

The downgrade reflects deterioration in call-center metrics for its customer service department. Moody’s attributed the deterioration to insufficient staffing.

“Abandonment rates in 2010 reached 30 percent for customer service, performance levels that are significantly worse than its peers,” the ratings agency said in a statement.

Moody’s noted, however, improvement since October 2010 in MetLife’s foreclosure tracking and monitoring process, which has been brought in-house. Its document execution process has also improved, with a quality control review of affidavits being implemented.

Another ongoing concern in customer service operations is a constraint on physical space. The lack of available space has 45 percent of the company’s customer service representatives working from home. MetLife allows the work-from-home arrangement after an employee has been on board for at least 90 days.

Moody’s did note that the servicer has made an effort to increase its Dallas-area office space. However, office build out won’t be completed until next year.

But the abandonment rate and time to answer calls in the collections department “were significantly improved from last year.”

MetLife has recruited new leaders from outside the company for its collections department, a move that has benefited the unit.

MetLife reported its total mortgage servicing portfolio at 618,900 loans for $116.796 billion as of June 30.

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