2008-11-25 00:47:04 -
Fitch Ratings takes the following rating actions on the U.S. residential primary servicer ratings for PHH Mortgage Corporation. (PHH Mortgage) as follows:
--U.S Residential Primary servicer rating for Prime Product affirmed at 'RPS1-';
--U.S Residential Primary servicer rating for Alt-A Product affirmed at 'RPS1-';
--U.S Residential Primary servicer rating for Home Equity Line of
Credit (HELOC) affirmed at 'RPS1-';
--U.S. Residential Primary specialty subservicer rating assigned at 'RPS1-'
Fitch Ratings also removes the residential primary servicer ratings for Prime, Alt-A and HELOC from Rating Watch Negative.
The rating actions are based on PHH Mortgage's unique business brand and private label operations, experienced and well-tenured management team, developed technology, well-established risk management practices and effective subservicing capabilities. PHH Mortgage, headquartered in Mt. Laurel, NJ, is a wholly owned subsidiary of PHH Corp., a leading provider of mortgage and fleet management services with a corporate rating of 'BBB+', Negative Outlook by Fitch.
The Rating Watch Negative was removed as the proposed sales of PHH and its parent did not occur and the company has continued to function effectively under the support of its publicly rated parent.
As of June 30, 2008, PHH Mortgage serviced a portfolio of 948,748 loans totaling approximately $145 billion. This represents an 18% reduction from the prior review period of June 30, 2007. The servicer's portfolio consists of $9.4 billion of FHA/VA loans, $87 billion of conforming conventional product, $35 billion of jumbo prime loans, $7.2 billion of Alt-A product, $1.8 million subprime product, $1 billion second lien product, $4.8 billion HELOC product $203 million HLTV product, and $330 million of CRA product.
Since the prior review, PHH Mortgage continued on its diversification and cost savings effort plans by growing services offered through its private label business arrangements and its loan origination business by phone. The company has also increased its private label subservicing capabilities to cover all areas of mortgage loan servicing. In addition, the servicer continued to make enhancements to its default technology and began expanding its back office operation and call center capabilities to both India and the Philippines.
PHH Mortgage indicated that they have hired an additional 10 agents in the Loss Mitigation area and increased both their inbound and outbound 1-60 days delinquent account calls to its India offshore provider. Furthermore, the servicer indicated that they have expanded their Vendor Management and Oversight department to now incorporate a comprehensive monthly review through its internal audit and quality analysis groups.
Fitch believes that PHH Mortgage continues to operate an effective servicing and subservicing platform. The servicer continued to maintain efficiencies while making enhancements to its systems, processes, and procedures and pursued its outsourcing objectives. However, Fitch will continue to monitor the effectiveness of recent and planned changes to PHH Mortgage's offshore outsourcing and its ability to maintain its portfolio performance and loan servicing capabilities in a rising delinquency environment.
Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. For more information on Fitch's residential servicer rating program, please see Fitch's report 'Rating U.S. Residential Mortgage Servicers', dated Nov. 29, 2006, which is available on the Fitch Ratings web site at
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Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site,
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Fitch Ratings, New York
Michael Laidlaw, 212-908-0251
Mary Kelsch, 212-908-0563
or
Media Relations:
Sandro Scenga, 212-908-0278
Email: mailto:sandro.scenga@fitchratings.com
