MetLife’s Servicer Rating Downgraded

Standard & Poor’s Ratings Services lowered MetLife residential mortgage loan servicer ranking to above average from strong, a statement yesterday said.

The downgrade was impacted by high customer-service and collection abandonment rates and average-speed-to-answer rates — a problem that S&P said it addressed in a July 2007 review of First Horizon Home Loans. While there has been improvement with customer service telephone statistics, collections performance has deteriorated.

MetLife said it is managing this issue by increasing collections and customer service staff. It is also outsourcing overflow collections call volume and some loss mitigation functions.

MetLife reported to S&P that Freddie Mac has rated MetLife’s investor reporting as Tier 1, while its default management operations were rated Tier 2.

Fannie Mae reportedly recognizes MetLife’s investor reporting as superior.

The ratings agency noted that MetLife entered a three-year subservicing contract with First Horizon National Corp. to service its remaining portfolio as part of the sale of the unit in August 2008.

“The company maintains an impressive level of automation and a strong management team,” S&P stated. “Additionally, the company’s default management expertise allows it to continue to minimize portfolio risk through reliable internal controls and prudent loan servicing practices.”