Regions Gets Rating For Alt-A, Subprime
Fitch Ratings has assigned new mortgage servicer ratings to Regions Mortgage for the management of alt-A and subprime credit quality loans.
Fitch assigned a "RPS2-" rating to Regions for both loan types.
Fitch said its rating reflects the experienced management, capable loan administration policies, effective default management procedures and competent use of technology at Regions Mortgage.
The ratings also reflect the financial strength of the parent company, Regions Financial Corp., which is rated "A+" by Fitch. Regions Financial Corp. has in excess of $80 billion of assets.
Regions is a residential mortgage originator and servicer headquartered in Memphis, Tenn. The company has an additional loan servicing facility in Hattiesburg, Miss.
At the end of last year, Regions Mortgage serviced more than 430,000 residential mortgage loans with an aggregate principal balance of over $38 billion. The portfolio consisted of 63.5% prime credit quality loans, 14.2% FHA/VA loans, 12.1% subprime, 8.9% alt-A and 1.2% high loan-to-value product.
Fitch said its review shows that Regions "has the requisite management, training, technology, and controls necessary to manage its projected 2005 growth." But at the same time, the rating agency cautioned that a "significant change in the complexion of the portfolio," such as the addition of a large number of lower credit quality subprime or nonperforming loans could stress the company's operations, especially in the area of default management.
"As a result, Fitch will continue to monitor Regions' effectiveness in maintaining consistent performance while pursuing its growth initiatives," Fitch said.
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