Moody's Investors Service late Tuesday downgraded Bank of America’s residential servicing ratings, citing continuing challenges the nation’s largest servicer faces with its 2008 purchase of Countrywide Financial Corp.
Moody’s said it is lowering its opinion of the bank’s servicing abilities, keeping it on alert for further downgrades. (The firm cut the underlying ratings on B of A’s servicing one notch, from the top rating to the second on a five-level scale.)
The ratings refer to the ability the servicer has to mitigate losses on loans it provides for securitizations. The ratings are used by investors in securitizations, and supposedly show how effective a servicer is at preventing defaults and maximizing recoveries.
B of A is the nation’s largest servicer of home mortgages with just over $2 trillion of receivables and a market share of 21.5%, according to figures compiled by National Mortgage News and the Quarterly Data Report.
B of A was among 14 banks that signed consent orders this spring with federal banking regulators, agreeing to improve their servicing procedures, specifically in regard to delinquencies and foreclosures.
