Moody's has placed on review for possible downgrade the servicing quality ratings of Bank of America, which recently halted certain foreclosures in 23 states.
Moody's said it will analyze B of A's servicing practices in regard to conventional loans as well as subprime, government, and second liens.
The ratings agency said it lowered the foreclosure and REO timeline assessment for the bank to 'average' from 'above average.'
"The rating action is due to two primary reasons: 1) irregularities in Bank of America's foreclosure process which could result in delayed foreclosures and longer REO timelines, as well as legal challenges to previously completed foreclosures and reputational risk for the servicing operation and its corporate parent; 2) deterioration of the company's collections, loss mitigation and timeline performance metrics, as well as relatively low levels of modification activity and high modification re-default rates on loans in Bank of America serviced RMBS."
Moody's also is reviewing the servicing practices of other large firms such as GMAC Mortgage and JPMorgan Chase.
A spokeswoman for B of A had no comment.
