Centex Rating Affirmed
Fitch Ratings has affirmed Centex Home Equity Co.'s residential primary servicer rating for subprime product at "RPS2+," citing the company's experienced management team, reliable loan administration processes and controls, effective default management strategies and continued success in resolving delinquent loans.
Fitch said the rating also reflects the financial strength of CHEC's parent, Centex Corp., which is rated "BBB+" by Fitch.
CHEC, based in Dallas, has approximately 320 servicing employees and maintains a loan servicing facility in Lewisville, Texas. As of March 31, CHEC serviced more than 100,000 loans for over $9.5 billion, which was an increase of almost 15% in loan volume and over 30% in dollar volume from one year earlier.
The portfolio consisted of 97% subprime product and 3% loans serviced for Fannie Mae with about $6.4 billion issued through residential mortgage backed securitizations.
Fitch said that over the past year, CHEC has enhanced its servicing operations by improving quality control over its customer service functions, implementing call recording technology, increasing the depth of its training programs, and tightening procedures and controls.
Fitch also noted some concerns during its review with regard to the lengthy timelines of CHEC's aged portfolio of real estate-owned as a result of loan default.
The rating agency said that CHEC's management has agreed to increase focus on the company's REO timeline management and is in the process of implementing procedural changes that will allow CHEC to dispose of its REO on a more timely basis.
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