IndyMac mortgage servicer rating on review for downgrade
Moody's Investors Service affirmed the servicer quality rating of IndyMac Mortgage Services, but said the firm remains on review for a possible downgrade.
IndyMac has been on review since October 2010 because of issues tied to foreclosure processes. Moody's said since then, the company improved its document processes, but not enough for analysts to upgrade ratings.
In late 2009, a New York judge forgave a borrower's IndyMac mortgage, thereby giving the property to the homeowner. Three years later, Moody's said IndyMac "could still face potential liability relating to the alleged irregularities in its foreclosure processes, including possible further action by the coalition of state attorneys general and federal agencies."
States have been cracking down on mortgage servicers and signed a $25 billion settlement last month to resolve foreclosure documentation issues at major servicing shops.
IndyMac's rating for servicing prime residential mortgages was affirmed as SQ3, while its rating for subprime and special servicing remained SQ3-.
The ratings evaluate IndyMac's ability to collect payments as well as its loss mitigation abilities and timelines for managing documents. An SQ1 rating is strongest while SQ5 is the weakest rating classification.
IndyMac is now a division of OneWest Bank.