The residential servicer ratings of Option One Mortgage Corp. have been downgraded by Fitch Ratings, and they remain on Rating Watch Negative.Option One's residential primary servicer rating for subprime products was downgraded from RPS1 to RPS2-plus, and its residential primary special servicer rating was downgraded from RSS1 to RSS2-plus. Fitch said the actions reflect the corporate rating of Option One's parent, Block Financial Corp, and its ultimate parent, H&R Block Inc., whose senior debt was recently downgraded to A-minus and placed on Rating Watch Negative. The rating actions also reflect the effect on Option One's servicing platform of decreased loan originations, changes in credit lines, and uncertainties regarding the sale of the servicing platform to Cerberus Capital Management LP, the rating agency said. The Rating Watch placement indicates that further downgrades are possible, depending on the outcome of the proposed sale. Fitch said the actions were also based on the operational challenges facing Option One in the subprime market. Fitch rates residential servicers on a scale of 1 to 5, with 1 being the highest rating.
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Michael Tannenbaum, whose experience in the financial services industry spans over 15 years, has a track record of helping companies scale and grow.
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April 24