Here at Lender Watch we monitor companies that are heavy into subprime. Confirming our concerns today was a downgrade of Ocwen Financial by Fitch Ratings. In the past two years, Ocwen has executed numerous high-profile servicing acquisitions, including buyouts of Barclays’ HomEq platform and Litton Loan Servicing’s portfolio and operations.
Ocwen has also acquired a $26 billion subprime portfolio from Saxon Mortgage Services in a deal that is scheduled to be completed in February. Additionally, Fitch reported that Ocwen is in the process of acquiring a significant subprime portfolio from an undisclosed major bank.
As we understand it Fitch is concerned about Ocwen’s offshoring as well. While such tactics often speak to economy of scale they do not speak well for customer satisfaction. Sadly, however, homebuyers don’t get to choose their mortgage servicer so Ocwen really might not care.
Take the case of Saxon Mortgage servicing (SCI). Even with one of the highest dissatisfaction ratings Saxon, owned by Morgan Stanley, looked attractive to Owen. It reminds us of when Household International looked attractive to HSBC Bank Plc.