Mortgage Daily Logo
mortgage news from industry experts

Servicer Rating Downgraded at Select Portfolio

Deteriorating subprime loan performance and a downgrade at its parent were among the factors behind a reduction in Select Portfolio Servicing Inc.’s servicer rating.

The downgrade impacts the Salt Lake City-based firm’s rating as a primary servicer of subprime residential mortgages as well as its special servicer rating.

SPS was previously known as Fairbanks Capital Corp. until it was acquired by Credit Suisse First Boston from PMI Group Inc. in 2005.

Moody’s Investors Service, which announced the action on Friday, said that SPS’ servicer quality assessment as a primary servicer of subprime residential mortgages was lowered to SQ2 from SQ2+.

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

The company’s rating as a special servicer was also downgraded to SQ2 from SQ2+.

The ratings agency noted that collection abilities, timeline management and servicing ability were all above average.

“SPS showed consistent and solid average speeds of answer and abandonment rates in their call center metrics even as the company grew its servicing portfolio, reflecting the company’s ability to accurately forecast call volumes and proactively staff its call center,” Moody’s said. “Collectors are trained to offer modifications, short sales, and deeds in lieu in addition to repayment plans to borrowers, prior to transitioning workouts onto the loan resolution team for underwriting and processing.”

SPS continues to bring its management and asset managers to major REO markets in order to increase local market knowledge and broker interactions.

Since Moody’s last review in November 2011, SPS has reportedly improved its short sale process by offering cash for keys to borrowers and tenants and by providing borrowers access to its own real estate broker network.

But Moody’s said that the loss mitigation assessment was downgraded to above average from strong primarily as a result of deterioration in its total cure and cash flowing metric ranking compared to peers because of improvement in peer performance.

In addition, subprime loan performance has been deteriorating compared to the servicer’s peers, according to Moody’s.

Another negative factor is the fundamental rating of SPS-parent Credit Suisse (USA), which has been reduced to A1 from Aa1.

Moody’s noted that SPS’ SQ2 rating as a primary servicer of residential second liens was affirmed.

SPS serviced 300,312 loans for $55.1 billion as of May 31.

The portfolio has grown since Sep. 30, 2011, when 197,631 loans were serviced for $31.1 billion.

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts