Fitch Takes Actions On Litton Ratings

Posted by Orb Staff on November 30, 2009 No Comments
Categories : Mortgage Servicing

Fitch Ratings has taken several actions on the U.S. residential primary servicer ratings for Litton Loan Servicing LP.

The agency affirmed Litton's primary servicer rating for Alt-A product at RPS1, its primary servicer rating for subprime product at RPS1, its primary specialty servicer rating for M.H. product at RPS2 and its residential special servicer rating at RSS1. Litton was also assigned an RPS1 specialty servicer rating for closed-end second liens. Its residential primary servicer rating for high loan-to-value product was withdrawn.

Fitch's actions reflect Litton's "highly experienced stable management team, strong default management expertise and continued investment in innovative and integrated technology and systems."

Fitch has not rated Litton for the closed-end second-lien product in the past, but says the servicer has serviced closed-end second-lien product effectively for many years. The special servicer rating reflects Litton's ability to liquidate nonperforming assets utilizing its default management and technology expertise.

As of June 30, Litton's servicing portfolio consisted of 379,657 residential mortgage loans totaling more than $60.6 billion. Litton primary services $57.9 billion consisting of 363,474 loans and special services $2.7 billion consisting of 16,183 loans.

The portfolio is broken down by rated product as follows:

  • Alt-A – 22,194 loans totaling $5.9 billion;
  • subprime – 275,115 loans totaling $48.2 billion;
  • closed-end second liens – 50,516 loans totaling $2 billion; and
  • manufactured housing – 5,790 loans totaling $445.2 million.

Litton also services agency loans. Litton has servicing sites located in Houston, Dallas and Atlanta. Litton services for residential mortgage-backed security securitizations, its owned portfolio and third parties. Litton has been servicing residential loans for 14 years, Alt-A for 13 years, closed-end second liens for 13 years, M.H. for 10 years and special servicing for nine years. Litton's M.H. portfolio continues to run off.

Over the past year, Litton has revised its loss mitigation processes and organization to modify loans to Home Affordable Modification Program (HAMP) guidelines, Fitch adds. Since April, Litton has begun modifying to HAMP guidelines. Litton has also developed a proprietary single system for modifications.

SOURCE: Fitch Ratings

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