Ocwen's Servicer Ratings Lowered

Moody's Investors Service has lowered Ocwen Federal Bank FSB's ratings for primary servicer of residential subprime mortgage loans and for special servicer from SQ1 ("Strong") to SQ2 (Above Average).The ratings reflect Ocwen's "excellent servicing performance and below-average financial stability," the rating agency said. Ocwen achieved "above-average collection results and strong loss mitigation" from May 1, 2002, through April 30, 2003, Moody's said. "Ocwen's low staffing ratio and extensive use of technology allow it to achieve impressive collection and default servicing metrics," the rating agency said. Ocwen, the mortgage servicing operation of Ocwen Financial Corp., is an established subprime loan servicer, but its parent is seeking to exit noncore business lines to focus on mortgage servicing and mortgage-related technology. Ocwen has been named as a defendant in potential class-action lawsuits alleging predatory servicing practices. Citing Ocwen's "already weak financial condition," Moody's said a negative outcome to the lawsuits "could further erode the company's financial position and its ability to sustain its otherwise impressive servicing results." Moody's can be found online at http://www.moodys.com.