Standard & Poor's placed its Above Average rankings on Ocwen Loan Servicing on CreditWatch negative as a residential mortgage subprime, special, and subordinate-lien servicer. Before these CreditWatch placements, the outlook was stable.
The rating agency placed the rankings on CreditWatch negative as a result of Ocwen's recent purchase of GMAC Mortgage (GMACM), Residential Capital's (ResCap) mortgage loan servicing unit. ResCap is the residential mortgage unit of Ally Financial. The purchase comes after Ocwen on Oct. 3 announced that it was buying Homeward Residential, which is another large mortgage servicer.
As of Sept. 30, S&P said that Ocwen had serviced 789,000 accounts. Due to these acquisitions, its portfolio will roughly triple in size. The rating agency wants to assess the servicing firms ability to properly integrate and service this large number of accounts.
On May 14, the rating agency lowered its residential prime, subprime, special, and subordinate-lien mortgage loan servicer rankings on GMACM to Average from Above Average and assigned a negative outlook to the rankings. S&P also affirmed its Above Average master servicer ranking on GMAC Residential Funding Co., a unit of ResCap, on Dec. 5, 2011.
Meanwhile, S&P also said today that its Above Average residential subprime, special, subordinate-lien, and manufactured housing rankings and stable outlook on Green Tree Servicing, a wholly owned unit of Walter Investment Management Corp. are not immediately impacted by the Oct. 24 announcement that Walter and Ocwen were jointly awarded the highest and best bid for GMACM in a bankruptcy court sponsored auction.