Ocwen Financial (OCN) is firing back at Fitch Ratings and other ratings agencies that have recently issued downgrades to Ocwen’s ratings due to the company’s glut of regulatory troubles.

In an update sent to Ocwen’s shareholders Thursday, Ocwen CEO Ron Faris said that despite accusations of mortgage servicing negligence and recent claims by Fitch that Ocwen displays “weaknesses in corporate governance and operational control framework,” no ratings agency has identified any actual servicing performance deficiencies among Ocwen-serviced loans in residential mortgage-backed securities.

On Wednesday, Fitch announced it was downgrading Ocwen’s mortgage servicer ratings due to “weaknesses in the company's control environment, senior management's lack of oversight in connection with identifying and resolving operational deficiencies as well as the inability to respond satisfactorily to regulatory requests for information, and the lack of sufficient escalation procedures that would raise serious issues to senior management.”

Citing those reasons, Fitch downgraded servicer ratings in a number of categories from a level 3 to a level 4. Fitch rates servicers on a 1-5 scale, with 1 being the highest rating, so the drop from 3 to 4 places Ocwen’s servicer ratings just one rung above Fitch’s lowest possible rating.

In his update, Faris notes that Fitch stated that despite the downgrade, Ocwen “continues to perform servicing functions at a proficient level.” Faris added that “objective data” on private-label security performance “continues to show that Ocwen excels in managing loss mitigation timelines, bringing borrowers current on their payments and keeping them current.”

According to Faris’ update, Ocwen is currently the servicer on approximately 4,000 non-agency RMBS transactions. Faris adds that of those 4,000 securities, approximately 695 have minimum servicer ratings criteria. Those transactions carry an unpaid principal balance of $44.8 billion.

“To date, including the recent announcement from Fitch, our servicer ratings have fallen below the minimum criteria set forth in 482 PLS agreements,” Faris said. “This represents approximately $34.6 billion in UPB serviced by Ocwen, or 8.7% of our total servicing portfolio.”

That’s one way to look at it. On the other hand, the 482 PLS agreements where Ocwen’s servicer ratings are now below the minimum means that Ocwen does not meet the minimum servicer ratings requirement in nearly 70% of the private-label securities it services (since 695 have that criteria).

But Faris said that Ocwen has not been notified by any RMBS trustee of intent to move non-agency RMBS servicing as a result of changes in servicer ratings or any other reason.

“We believe our performance on Ocwen-serviced pools, as calculated by BlackBox Logic data for subprime non-agency securities, is evidence of our PLS servicing strength,” Faris said in the update. “As communicated previously, Ocwen outperforms other servicers by almost 10 percentage points in the percentage of subprime PLS loans that have made 10 or more payments in the prior 12 months. Similarly, the percentage of borrowers who have made all 12 payments in the last 12 months is 10 percentage points higher.”

Fitch also recently warned that Ocwen-related RMBS deals are facing a downgrade of their own due to Ocwen’s latest round of issues.

But Faris said bondholders need only to look at Ocwen’s record of performance and cash delivery when deciding on the future of their mortgage bonds.

“Despite the recent challenges around the company, and despite the fact that more trusts have the option to transfer servicing today than did yesterday, we believe, consistent with our past experiences, that trustees and bondholders will look to our cash generation outperformance and act in their economic best interest in deciding not to exercise their right to transfer servicing,” Faris said.

“That said, there is no guarantee that trustees and bondholders will not decide to transfer servicing,” Faris conculded. “Should that occur, we believe that any forced transfer of servicing would result in accelerated recovery of advances outstanding, would not be in the best interest of the RMBS trusts as a whole and would be disruptive and potentially harmful to consumers whose loans would be affected.”