Fitch Ratings said Tuesday that it has affirmed the primary subprime servicer rating of Carrington Mortgage Services, LLC at the 'RPS4' level -- Fitch generally rates servicers on a 1 to 5 scale, with 5 being the worst. CMS is a subsidiary of hedge fund Carrington Capital Management, LLC -- which, you might recall, purchased the servicing portfolio from now-defunct New Century Mortgage Corporation post-bankruptcy (and most of the company's line staff are carryovers from New Century). As of July 31, 2007, Fitch noted that CMS serviced a portfolio of nearly 90,000 loans with an outstanding principal balance of over $16 billion, nearly 63 percent of which is comprised of adjustable rate product. In discussing the low rating for CMS, Fitch had this to say:
In the brief time since its establishment, CMS has stabilized a servicing platform that experienced deterioration throughout the NCMC bankruptcy process, hired an experienced management team, and invested in technology to further support its growth initiatives. However, the rating action reflects Fitch's concern over the company's lack of historical operating and financial history. Additionally, at the time of the Fitch review, CMS had not yet completed full internal audits of all functional areas of servicing, established functional level training initiatives, or completed an integrated disaster recovery test.
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