Moody's Investors Service announced updates to its Servicer Quality Assessment rules, which will change the way the ratings firm reviews U.S. mortgage servicers, National Mortgage News reported Jan. 9.
Moody’s has integrated improvements based on loan-level performance data and expanded reporting from securitization trusts, and implemented a more formal weighting system for several performance categories, including collections, loss mitigation foreclosure timeline management, loan administration and servicer stability, National Mortgage News reported. This new information will supplement loan-level performance data culled from servicer portfolios.
Using monthly data from the trusts when assessing a servicer’s collections roll rates, cure rates and foreclosure process effectiveness is more timely and includes “the performance of servicers that we do not assess," William Fricke, Moody’s vice president and senior credit officer, told National Mortgage News.
The new rating methodology covers servicers of prime loans, subprime loans, Alt-A, second-lien loans, high loan-to-value ratio loans and manufactured home loans.
The new methodology reinstates Moody’s Approach to Rating Residential Mortgage Servicers, originally published on Jan. 19, 2001, National Mortgage News reported.
Read Moody's Methodology for Assessing RMBS Servicer Quality report.