S&P Global Ratings has raised Ocwen Loan Servicing's rankings for both its residential and commercial segments.
The ratings agency raised its rankings of Ocwen as a residential mortgage prime, subprime, special and subordinate-lien servicer to average from below average, S&P said in a news release Tuesday.
Similarly, Ocwen's rankings as a commercial mortgage special servicer and a small-balance commercial mortgage primary and special servicer were raised to average from below average.
The ratings agency also said that the outlooks for the rankings were stable and that it would add Ocwen to the select servicer risk.
"We believe Ocwen has strengthened its internal control environment and reduced the number and criticality of internal audit findings, and we believe the first and second lines of defense will continue to season to provide adequate risk management," S&P said in a news release.
"In our view, Ocwen also continues to invest in staff, training and technology to further develop its operations," the agency continued. "The company's executive and senior management appears focused on the continued improvement of Ocwen's internal controls environment and loan servicing performance."
S&P chose to raise Ocwen's residential rankings because of its belief that Ocwen has improved its control environment by reducing critical internal audit findings in the company's servicing and default operations.
Meanwhile, Ocwen's rankings for its commercial business were downgraded along with the residential rankings to below average in June 2015 as a reflection of the magnitude of the problems in the company's core residential business. With those issues somewhat mitigated, the agency chose to raise the servicer's rankings in these categories as well.
The agency did warn though that it still notes high- and medium-risk findings in the internal audits, but that these were in line with other servicers with an average ranking. S&P also noted that the regulatory and investor scrutiny Ocwen has faced have moderated, but cited a Securities and Exchange Commission request for information and continued monitoring by New York and California as adding some uncertainty.
