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2nd Upgrade for Subprime Servicer

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For the second time in 12 months, a servicer of subprime and second-lien loans has had its servicer rating raised.

Moody’s Investors Service said today that it upgraded Green Tree Servicing LLC’s servicer quality rating for subprime mortgages to SQ2- from SQ3+. In addition, the company’s rating for second liens was also upgraded to SQ2-.

Ratings range from the best possible rating of SQ1+ to the lowest possible rating of SQ5-.

The upgrade reflected an improvement in the servicer’s loss mitigation.

It was the second time in 12 months that Moody’s boosted Green Tree’s rating. In February 2009, Moody’s increased the servicer’s ratings to SQ3+ from SQ3.

Green Tree’s loss- mitigation abilities are strong, while its collections abilities are above average and its foreclosure timeline and REO timeline management is average. But its servicing stability is below average, Moody’s said.

The St. Paul, Minn.-based firm serviced 727,665 loans for $34.6 billion as of Dec. 31, 2009, according to the ratings agency. The portfolio included $15.5 billion in manufactured housing loans, $11.8 billion in subprime mortgages and $7.3 billion in second liens.

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